ITO, Ward - 6(2), Kolkata, Kolkata V. M/s. Lily Exporters Pvt. Ltd., Kolkata

ITA 984/KOL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2461 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2010
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 13-05-2010
• Court: TRIBUNAL
• Department Lawyers: PIYUSH KR KOLHE
• Assessee Lawyers: R SALARPURIA
• Keywords: Unexplained cash credit; Set aside
• Section: 68

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA ( (( ( ) )) ) . .. . . . . . , , , , !' !' !' !', ,, , #$ #$ #$ #$ . . . . . . . . %& %& %& %&, , , , ' !' ' !' ' !' ' !' [BEFORE HONBLE SRI D. K. TYAGI, JM & HONBLE SRI K. K. GUPTA, AM] $( $( $( $( / ITA NO. 984 984 984 984 /KOL/2010 ,- ./ ,- ./ ,- ./ ,- .// // / ASSESSMENT YEAR : 2005-06 INCOME-TAX OFFICER, WD-6(2), KOLKATA. -VS- LILY E XPORTERS PVT. LTD. (PA NO. AAACL 5836 C) (12 / APPELLANT ) (312/ RESPONDENT ) FOR THE APPELLANT : / SRI PIYUSH KR. KOLHE FOR THE RESPONDENT : / SHRI R. SALARPURIA !4 / ORDER PER D. K. TYAGI, JM ( . . . . . . . . , , , , !' ) THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AG AINST THE ORDER OF THE LD. CIT(A), KOLKATA DATED 03.02.2010 FOR THE ASSESSMEN T YEAR 2005-06 IN DELETING THE ADDITION OF RS.56,01,870 MADE U/S. 68 OF THE I. T. ACT. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE SHOWED PURCHASE ON 14.01.2004 OF 5,57,400 SHARES OF POLYLINK POLYMERS LTD. (PLPL) AT THE RATE OF RS.1.55 PER SHARE FOR A TOTAL CONSIDERATION OF RS.8,63,970/ -. THE ASSESSEE SOLD THE SAID 5,57,400 SHARES ON 2.3.2005 AND 3.3.2005 AT THE RATE OF RS.1 1.59 PER SHARE FOR A TOTAL CONSIDERATION OF RS.64,60,266/-. THE ASSESSEE CLAI MED TO HAVE EARNED LONG TERM CAPITAL GAIN AMOUNTING TO RS.55,96,296/-. THE ASSESSEE CLA IMED EXEMPTION OF THE SAID LONG TERM CAPITAL GAIN U/S. 10(38) OF THE I. T. ACT. IN THE ORIGINAL ASSESSMENT ORDER THE AO HELD THAT THE SAID SUM OF RS.55,96,296/- WAS NOT LO NG TERM CAPITAL GAIN BUT TREATED THE SAME AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. IN APPEAL, THE LD. CIT(A) HELD THAT THE AO WAS NOT JUSTIFIED TO TREAT THE DIFFERENCE BETWEEN THE SALE PRICE AND PUR CHASE PRICE OF SHARES AT RS.55,96,296/- AS UNEXPLAINED CASH CREDIT AND DELETED THE ADDITION . THE REVENUE THEN CARRIED THE MATTER TO THE ITAT. THE ITAT RESTORED THE MATTER TO THE F ILE OF THE AO TO RE-DECIDE THE ISSUE AFTER CONSIDERING THE RATE OF SHARES OF PLPL ON THE DATE THE ASSESSEE SOLD THOSE SHARES I.E. ON 2 ND AND 3 RD MARCH, 2005 AND NOT TAKING THE RATE OF SHARE AS ON 23.3.2005. THEREAFTER, THE AO PASSED THE ORDER U/S. 254/251/1 43(3) OF THE I. T. ACT ON 4.12.2008. SUBSEQUENTLY, THERE WAS A CHANGE OF THE ITO AND HE PASSED ANOTHER ORDER ON 30.11.2009 BY MAKING AN ADDITION OF RS.56,01,870/- AS UNEXPLAI NED CASH CREDIT. THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND HE DIRECTE D THE AO TO DELETE THE ADDITION AND 2 ALLOWED THE ASSESSEES GROUND OF APPEAL. AGGRIEVED BY THE SAID ORDER, NOW THE REVENUE IS IN APPEAL BEFORE US. 3. AT THE TIME OF HEARING BEFORE US, THE LD. DR REL IED ON THE ORDER OF THE AO AND PRAYED BEFORE THE BENCH TO SET ASIDE THE ORDER OF T HE LD. CIT(A) AND RESTORE THAT OF THE AO. HE FURTHER SUBMITTED THAT THE LD. CIT(A) MADE A MISTAKE IN DELETING THE ADDITION OF RS.56.01,870/- MADE U/S. 68, WITHOUT CONSIDERING TH AT AS PER REPLY OF THE CALCUTTA STOCK EXCHANGE LTD. NO PURCHASE OF SHARE WAS MADE IN THE NAME OF THE ASSESSEE SO THE QUESTION OF EARNING CAPITAL GAIN BY SELLING SUCH S HARES DOES NOT ARISE AT ALL. 4. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE WHILE REITERATING HIS SAME SUBMISSIONS AS SUBMITTED BEFORE THE LOWER AUTHORITI ES RELIED ON THE ORDER OF THE LD. CIT(A) AND URGED BEFORE THE BENCH TO CONFIRM HIS AC TION 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE LD. CIT(A) HAD DELETED THE ADDITION B Y OBSERVING AS UNDER : I HAVE GONE THROUGH THE SUBMISSIONS AND THE APPELL ANT AND ALSO THE ORDER OF THE AO. THE HONBLE ITAT IN THEIR ORDER AT PARA 16 SET ASID E THE ORDER OF THE AUTHORITIES BELOW AND RESTORED THE MATTER TO THE FILE OF THE AO TO RE -DECIDE THE ISSUE AFTER CONSIDERING THE RATE OF SHARE OF PLPL AS ON 2 ND AND 3 RD MARCH, 2005 INSTEAD OF CONSIDERING THE RATE AS ON 23.3.05. AS SEEN FROM RECORD THE AO PASSED AN O RDER U/S. 254/251/143(3) OF THE I. T. ACT ON 5.12.2008. SUBSEQUENTLY THERE IS A CHANGE O F THE ITO AND THE NEW INCUMBENT HAS PASSED ANOTHER ORDER ON 30.11.2009 BY MAKING AN ADDITION OF RS.56,01,870/- AS UNEXPLAINED CASH CREDIT. IT IS NOT KNOWN UNDER WHA T CIRCUMSTANCES THE AO HAS PASSED THIS ORDER WHEN ALREADY THE EARLIER AO HAS GIVEN AN EFFECT TO THE HONBLE ITAT ORDER ON 5.12.2008. EVEN GOING INTO THE MERITS, THE AO HAS NOT DISCUSSED ANYTHING REGARDING THE UNEXPLAINED CASH CREDIT ADDITIONS. THE APPELLA NT HAS FILED THE QUOTATIONS FROM THE CALCUTTA STOCK EXCHANGE LTD. SHOWING THE QUOTATIONS OF POLYLINK POLIMERS LIMITED ON 2.3.05 AND 3.3.05. ON THOSE DATES THE SHARE WAS A S RS.11.60 PAISE. IN VIEW OF THIS, THE AO WAS NOT JUSTIFIED IN PASSING THE ORDER BY MAKING AN ADDITION ON THE UNEXPLAINED CASH CREDIT. IN VIEW OF THE ABOVE, I DIRECT THE AO TO DELETE THE ADDITION AND THESE GROUNDS OF APPEAL ARE ALLOWED. WE FIND THAT THE ABOVE FINDING OF THE LD. CIT(A) IS SUPPORTED BY THE DOCUMENTS FILED BY THE ASSESSEE IN ITS PAPER BOOK FROM PAGES 70 TO 88 AND THE REVENUE HAS NOT BROUGHT OUT ANY CONTRARY MATERIAL TO CONTROVERT THE FINDINGS OF THE LD. CIT(A). THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND THE SAME IS HEREBY UPHELD. THE APPEAL OF THE REVENUE IS, THEREFORE, DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 16.7.10 SD/- SD/- . . . . . . . . %& %& %& %&, , , , ' !' . . . . . . . . , , , , !' (K. K. GUPTA) (D. K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER ( (( (' ' ' ') )) ) DATED :16TH JULY, 2010 3 56 ,78 ,9 JD.(SR.P.S.) !4 : 3,,; <;.=- COPY OF THE ORDER FORWARDED TO: 1. 12 /APPELLANT - ITO, WARD-6(2), KOLKATA 2 312 / M/S. LILY EXPORTERS PVT. LTD., 7, LYONS RANGE, 3 RD FLOOR, KOLKATA-1. 3. ,4/ THE CIT, KOLKATA 4. ,4 ()/ THE CIT(A), KOLKATA 5. C, 3, / DR, KOLKATA BENCHES, KOLKATA ; 3,/ TRUE COPY , !4D/ BY ORDER , E $8 / DEPUTY REGISTRAR .