ITO WARD 2(1), KOLKATA, KOLKATA V. INFINITY HOUSING PROOJECTS PVT LTD, KOLKATA

ITA 841/KOL/2025

AI Insights

The case involves an appeal by the Income Tax Officer, Ward 2(1), Kolkata against the order of the National Faceless Appeal Centre, Delhi, which had allowed the appeal of Infinity Housing Projects Pvt. Ltd. for the Assessment Year 2012-13. The primary contention was regarding the non-consideration of certain evidences by the Assessing Officer, which were later considered by the CIT (A). The Tribunal observed that the evidences and explanations provided by the assessee were adequately considered in the remand report and the subsequent order by the CIT (A).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669450 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P.N. BARNWAL
• Assessee Lawyers: AKKAL DUDHWEWALA
• Keywords: Commercial expediency; Source of fund; Share purchase agreement
• Section: 143(3); 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE SHRI GEORGE MATHAN, JM AND SHRI SANJAY AWASTHI, AM ITA No. 841/KOL/2025 (Assessment Year: 2012-13) ITO Ward 2(1), Kolkata P-7, Chowringhee Square, Aaykar Bhavan,Kolkata-700069 West Bengal Vs. Infinity Housing Projects Pvt. ltd. Plot-13, Block-GP, Salt Lake City, Sector-V, Kolkata-700091 West Bengal (Appellant) (Respondent) PAN No. AABCI7965C Assessee by : Shri Akkal Dudhwewala, AR Revenue by : Shri P.N. Barnwal, DR Date of hearing: 24.06.2025 Date of pronouncement: 25.06.2025 O R D E R PER GEORGE MATHAN, JM: This is an appeal filed by the Revenue against the order of the National Faceless Appeal Centre, Delhi [the learned CIT (A)] in appeal no. ITBA/NFAC/S/250/2024-25/1068354810(1) dated 05.09.2024 for the A.Y. 2012-13. 02. Shri Akkal Dudhwewala represented on behalf of the assessee and Shri P.N. Barnwal represented on behalf of the Revenue. 03. The appeal of the Revenue is time barred by 138 days. Considering the facts and circumstances of the case, we find that there is plausible reason to condone the delay and the delay of filing the appeal is hereby condoned. 04. At the time of hearing, the ld. Sr. DR submitted that the assessee has not been able to produce all evidences before the ld. AO. It was Page | 2 ITA No. 841/KOL/2025 Infinity Housing Projects Pvt. Ltd; A.Y. 2012-13 submission that the ld. CIT (A) has without considering the order of the ld. AO allowed the appeal of the assessee. 05. In reply, the ld. AR submitted that evidences had been produced before the ld. AO but the ld. AO did not consider any of the evidences. It was further submission that the evidences produced before the ld. CIT (A) was sent by the ld. CIT (A) to the ld. AO and a remand report was called for from the ld. AO which was shown at pages 86 to 91 of the Paper Book. It was the submission that the ld. AO did not give any adverse inference in the remand proceedings. The remand report dated 04.04.2018, reads as follows: - “To The Commissioner of Income Tax (Appeal)-1, Kolkata, Aaykar Bhavan, P-7, Chowringhee Square, Kolkata-700069 Respected Sir Sub: Calling for Remand Report in the case of M/s Infinity Housing Projects Private Limited having PAN-AABC17965C for the Assessment Year 2012-13 in Appeal No. 980/CIT(A)-1/W/2(3)/15-16 matter regarding. Ref: Your Letter No. F.No.CIT(A)-1/Kol/Remand/16-17/1391 dated 28.12.2016 and this office's No. ITO Ward2(3)/Remand & Appraisal/16-17/930 dated 11.01.2017 Kindly refer to above. As directed by your goodself for furnishing a remand report in respect of the above mentioned assessee on the following points. (i) To submit your comments on the written submissions/documents submitted by the appellant, including admission of fresh/additional documents filed, if any which were filed during the appellate proceedings and to comment upon the applicability of provision of Rule 46A. (ii) To verify the genuineness of the sources of issued and paid up 9,88,750 equity shares Face Value of Rs. 10/- with premium of Rs. 295/. Therefore, total capital raised of Rs. 30,15,68,750/- during the AY 2012-13 after issuing summons ws 131 to verify the identity and genuineness of the impugned cash creditors in respect of payments made by the directors/subscribers to share capital, their identity, genuineness for the impugned amount added u/s 68 to the total income of the assessee company. Page | 3 ITA No. 841/KOL/2025 Infinity Housing Projects Pvt. Ltd; A.Y. 2012-13 In connection to remand report, Shri Piyush Bajoria, Director of M/s Infinity Housing Projects Private Lunited and Mis Infinity Townships Private Limited has been summoned u's 131 of the Incone Tax Act. Shri Bajoria appeared and several bearings were taken along with documentary / supporting papers in respect of 9,88,750 equity shares against which total capital of Rs 30,15,68,750/- for the assessment year raised. Following documents were produced and examined- 1. Original Board Meeting Minutes Book of M/s Infinity Housing Projects Private Limited for issue of 9,88,750 equity shares of Rs. 10/- each at a premium of Rs. 295/- per share to M/s Infinity Townships Private Limited. 2. Original Shareholders Minutes Book of M/s Infinity Townships Private Limited approving the investment in 9,88,750 equity shures of Rs. 10/- each at a premium of Rs. 295/- per share of Mis Infinity Housing Projects Private Limited. 3. Balance Sheet, Books of accounts, Ledgers, Bank statements, share certificates in original. 4. Establishing the identity of M/s Infinity Townships Private Limited and director of M/s Infinity Housing Projeets Private Limited and M/s Infinity Townships Private Limited. This is to mention that Mr. Bajoria is director in both the companies and is Asst. Vice President in the parent company-M/s Infinity Infotech Parks Limited. 5. Copy of Incorporation certificates issued by ROC, Kolkata of both the companies furnished. 6. M/s Infinity Townships Private Limited (PAN- AABC13833K) is regularly assessed under DCIT/ACTT Cir 2(1)/Kol 7. Latest Trade Licenses of both the companies furnished 8. Infinity Townships Private Lunited is registered with Service Tax Authority and under Assam VAT. Copy enclosed. It is also registered with Professional Tax both for the Employer and Employee. It is registered with EPF department and Shop & Establishment Act 9. The paid-up share capital of M/s Infinity Housing Projects Private Limited is fully disclosed as Investment by M/s Infinity Townships Private limited. 10. M/s Infinity Infotech Parks Limited (PAN AABCI06923) is registered with ROC, Kolkata and is regularly assessed under DCIT/ACIT Cir 2(1)/Kol. 11. The registered office of both the company namely Mix Infinity Housing Projects Private Limited and M/s Infinity Townships Private Limited are situated at Infinity Tower. Plot A3, Block-GP Saltlake, Sector-V, Kolkata-91 which is a renowned building in Sector -V, Kolkata The registered office of the parent company M/s Infinity Infotech Parks Limited is also located at the same Infinity Tower address. The Infinity Tower is owned by the parent company. Page | 4 ITA No. 841/KOL/2025 Infinity Housing Projects Pvt. Ltd; A.Y. 2012-13 12. The parent company, M/s Infinity Infotech Parks Limited's 10 percent share is held by Mis West Bengal Electronics Industrial Development Corporation (\"WEBEL\"), a Govt. of West Bengal Undertaking. It is assessed for property tax by Nabadiganta Industrial Township Authority and has electricity connection from West Bengal State Electricity Distribution Co. Ltd. The trade license of Infinity Infotech Parks Limited has been furnished with property tax receipts and is also registered with Service Tax Authority, Professional Tax- both for Employer and Employee, EPP, ESIC and Shop & Establishment Act. 13. M/s Infinity Housing Projects Pvt. Ltd. has only one shareholder namely, M/s Infinity Townships Private Limited. The entire share subscription amount has been received from the holding company Le M/s Infinity Townships Private Limited. During the FY 2011-12, the company received from Infinity Townships Private Limited in aggregate sum amounting to Rs 45,59,83,750/- , out of which an amount of Rs. 15,44,15,000/- has been refunded and for the remaining net amount of Rs. 30,15,68,750/- Infinity Housing Projects Pvt. Ltd issued 9.88.750 equity shares of Rs. 10/- each at a premium of Rs. 295/- per share to Infinity Townships Private Limited 14. M/s Infinity Townships Private Limited in turn is promoted by M/s Infinity Infotech Purks Limited which provided funds for execution of the projects. The net worth of M's Infinity Townships Private Limited is Rs. 16,01,000/- which comprises Rs. 8 51,000/- share capital and Reserve & Surplus of Rs. 7,50,000/-. As on the Balance Sheet date ie 31.03.12 the value of Work-In- Progress stands at Rs. 38.33 crores and investment in Plxod assets is at Rs. 97.78 lacs 15. M/s Infinity Townships Private Limited is developing a residential project at Gauhati, Assam and has taken Office on Rent at G.5. Road, Gauhati-781005, Assam. The project has received NOC and Occupancy Certificate from Gaulsatı Municipality. Assam Electricity Board has given bulk power load to the project. The project is developed under a development agreement with M/s Assam Plywood Ltd. which owns the land 16. The ultimate holding company Infinity Infotech Parks Limited derived its revenue and earnings from leasing/renting of office spaces developed by it at Saltlake namely, Infinity Tower, Infinity Beachurmark Tower and Godrej Waterside on leasehold land granted by M/s West Bengal Electronics Industrial Development Corporation (\"WEBEL\") Its revenue from Renting operating activities and other earnings is Rs. 71.56 crore in the FY 2011-12. Its net worth is Rs 32.56 crore and borrowings from banks and Financial Institutions is Rs. around Rs 255 crore Thus M/s Infinity Housing Projects Pvt. Ltd. and M/s Infinity Townships Private Limited are subsidiary companies of M/s Infinity Infotech Parks Limited. To have a proper control over the subsidiary companies, the directors are nominated by the parent company among the most qualified and experienced person. 17. The fund was provided by M/s Infinity Infotech Parks Limited. The major sources of fund of M/s Infinity Infotech Parks Limited during FY 2011-12 is tabulated as hereunder - Page | 5 ITA No. 841/KOL/2025 Infinity Housing Projects Pvt. Ltd; A.Y. 2012-13 Sources Amount (in Rs.) Receipts from operational and other activities 71,56,40,872 Owned Capital and Reserves 32,56,31,770 Secured Borrowed Fund from Banks 254,92,54,567 Total 359,05,27,209 The above financial data exhibits that the parent company is a person of sufficient means to fund the financial needs of group companies promoted by it for undertaking and carrying on the projects. Such a decision is always taken on commercial expediency. This satisfies the condition of proving the creditworthiness of the shareholder/ultimate shareholder of the company. 18. Both the Infinity Townships Private Limited and Infinity Infotech Parks Limited are operational and active company. The funds were routed through bank accounts which are still active. The Bank statements reflect normal banking transactions of varied nature and no cash deposit was found prior to encashment of cheques. The bank statements of both infinity Townships Private Limited and Infinity Infotech Parks Limited are furnished. 19. During the hearing proceedings the assessee filed copy of the paper book filed before the Ld. CIT(A)-1 as under which has been examined - SI No Particulars Page No. 1. Copy of the ITR Acknowledgement along with annual financial statements for the year ended 31.03.2012 1-13 2. List of the shareholders of the assessee company as on 31.03.2012. 14 3. List of allottees to whom 9,88,750 Equity shares issued during the year were allotted by the assessee company. 15 4. Copy of Form 2 filed with the ROC in respect of share capital issued during the F.Y. 2011-12 16-21` 5. Copy of the Board Resolution passed by the assessee’s holding company, M/s Infinity Townships Pvt. Ltd. to subscribe to the shares of the assessee company 22 6. Copy of the Certificates of Incorporation of the share subscriber, M/s Infinity Townships Pvt Ltd. 23 7. Copy of the audited financial statements of the share subscriber, M/s Infinity Townships Pvt Ltd 24-42 8. Copy of the Acknowledgement of the share subscriber, M/s Infinity 8. Townships Pvt Ltd. for the AY 2012-13 along with the order passed u/s 143(3) by the ITO, Ward 2(3), Kolkata dated 30.03.2015 43-49 9. Copy of the relevant bank statement of the share subscriber, M/s Infinity 9. Townships Pvt Ltd. for the FY 2011-12 evidencing payment of share application monies through proper banking channel. 50-73 10. Statement giving the details of source of funds and also the source of the source of funds in respect of share capital missed by the assessee company during the year 74-79 Page | 6 ITA No. 841/KOL/2025 Infinity Housing Projects Pvt. Ltd; A.Y. 2012-13 11. Copy of the application made before the ITO, Ward 2(3) for issuance of certified copy of the statement recorded u/s 131 from the Director. Shri G.S. Bajoria of the assessee company 80 12. Copy of the Form 16A issued by the Infinity Infotech Parks Limited in respect of salary paid to Shri G.S.Bajoria 81-82 20. Shri Bajoria vide its submissions stated that the parent company (M/s Infinity Infotech Parks Limited) which is holding company of M/s Infinity Townships Private Limited and M/s Infinity Housing Projects Pvt. Ltd. is engaged in the real estate sector and presently has operation projeets (IT Parks) at Saltlake, Sector-V, Kolkata. 21. Infinity Townships Private Ltd. is engaged in the business of development of Residential Projects situated at Guwahati, Assam. The company also in agreement with M/s Assam Plywood Pvt Ltd which owns the land admeasuring 4.33 acres. 22. M/s Infinity Housing Projects Pvt. Ltd is engaged in the business of development of residential project at Guwahati, Assam. For this purpose, the company has entered into a Joint Development Agreement with M/s B.K. Planners Private Limited which owns the land situated at Dharapur. Guwahati, Dist-Kamrup, Assara admeasuring approximately 60 bigha (around 20 acres). The project is in nascent stage and yet to take off. The company in association with the landowner is in the process of obtaining sanction for the project and had paid the Building permission fee. The preliminary work prior to commencement of construction is in progress. 23. Presently, Infinity Townships Private Limited has been merged/amalgamated with its holding company M/s Infinity Infotech Parks Limited vide NCL 1/Kol order dated 12.12.2017. The shares held by the Infinity Townships Private Limited stands transferred to M/s Infinity Infotech Parks Limited and Infinity Housing Projects Pvt Ltd is now a direct subsidiary of Infinity Infotech Parks Limited. Shri Piyush Bajoria, Director of M/s Infinity Housing Projects Private Limited and Mis Infinity Townships Private Limited has been summoned u/s 131 of the Income Tax Act. Shri Bajoria in response to notice u/s 131 of the 1. T. Act, furnished and explained along with documentary /supporting papers in respect of 9,88,750 equity shares investment against which total capital of Rs. 30,15,68,750/- for the assessment year raised. Kind Regards, Yours sincerely, Sd/- (Kundan Chakma) ACIT(OSD), Ward - 2(3), Kolkata” Page | 7 ITA No. 841/KOL/2025 Infinity Housing Projects Pvt. Ltd; A.Y. 2012-13 06. It was the submission that as the ld. CIT (A) has considered the remand report and has considered the explanation and had deleted the addition, no interference in the order of ld. CIT (A) was called for. It was the submission that the appeal filed by the Revenue is liable to be dismissed. 07. We have considered the rival submissions. A perusal on the facts of the present case clearly shows that the issue of the share capital which has been raised by the AO is clearly out of its sisters concerns which is a going concern and is in the business of real estate and the evidences have also been produced before the ld. Assessing Officer. The statements of the directors have also been recorded and then, the ld. AO has given a remand report wherein no adverse comments have been drawn but has categorically mentioned that the documents have been furnished and explained along with documentary and supporting papers in respect of the equity share investment. As the ld. CIT (A) has called for the remand report and has allowed the appeal on the basis of the remand report provided by the ld. Assessing Officer, we find no reason to interfere in the order of the ld. CIT (A) as the Revenue has not been able to dislodge any of the findings of the fact as arrived by the ld. CIT (A) or in the remand report. 08. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 25.06.2025. Sd/- Sd/- (SANJAY AWASTHI) (GEORGE MATHAN) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) Kolkata, Dated: 25.06.2025 Sudip Sarkar, Sr.PS Page | 8 ITA No. 841/KOL/2025 Infinity Housing Projects Pvt. Ltd; A.Y. 2012-13 Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "