ITO WARD-7(1), KOLKATA, KOLKATA V. LOGIC INFOTECH LIMITED, KOLKATA

ITA 1379/KOL/2024

AI Insights

The case involves Logic Infotech Limited, which was accused by the Income Tax Officer of receiving unexplained money amounting to Rs. 22,00,000 from M/s. Pushpanjali Hirise Pvt. Limited during the financial year 2015-16. The Assessing Officer initiated proceedings under section 147 of the Income Tax Act based on information from DDIT (Inv.), Kolkata. The assessee contested the addition, providing bank statements and evidence that the amount was received from M/s. Skylight Distributors Pvt. Limited, not M/s. Pushpanjali Hirise Pvt. Limited. The CIT(Appeals) sided with the assessee, leading to the Revenue's appeal to the ITAT, which also favored the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473217 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Other Referred Cases: Principal Commissioner of Income Tax, Central-2, Kolkata -vs.- BST Infratech Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 147; 148; 143(1); 69A

Judgement Text

" ITA No. 1379/KOL/2024 (A.Y. 2016-2017) Logic Infotech Limited 1 IN THE INCOME TAX APPELLATE TRIBUNAL, ‘SMC’ BENCH, KOLKATA Before Shri Duvvuru RL Reddy, Vice-President (KZ) I.T.A. No. 1379/KOL/2024 Assessment Year: 2016-2017 Income Tax Officer,……………………………....Appellant Ward-7(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 -Vs.- Logic Infotech Limited,……………………....…Respondent 21/7, Sahapur Colony, New Alipore, Kolkata-700053 [PAN:AAACL9585G] Appearances by: Shri Somnath Das Biswas, Sr. D.R., appeared on behalf of the Revenue Shri Miraz D. Shah, A.R., appeared on behalf of the assessee Date of concluding the hearing: January 21, 2025 Date of pronouncing the order: March 17, 2025 O R D E R The present appeal is preferred by the Revenue against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 26th April, 2024 for the Assessment Year 2016-17. ITA No. 1379/KOL/2024 (A.Y. 2016-2017) Logic Infotech Limited 2 2. Brief facts of the case are that the assessee is a Company, which filed its return of income for the assessment year 2016-17 showing total income of Rs.7,30,156/-. The return was processed under section 143(1) of the Act. Credited information received by the ld. Assessing Officer from the DDIT (Inv.), Unit-4(2), Kolkata in the case of Puspanjali Hirise Pvt. Limited. Therefore, the ld. Assessing Officer received further information that the assessee has received an amount of Rs.22,00,000/- from M/s. Puspanjali Hirise Pvt. Limited during financial year 2015-16. Thereafter the ld. Assessing Officer initiated the proceedings under section 147 of the Act and issued notice under section 148 on 30.03.2021. The assessee filed its return of income on 19.04.2021 admitting the income of Rs.7,30,160/-. A show-cause notice was issued to the assessee on 24.03.2022 requesting to explain why proposed variation should not be added to the income of the assessee. The assessee has submitted its reply on 25.03.2022 stating that no money amounting to Rs.22,00,000/- was received from M/s. Puspanjali Hirise Pvt. Limited in the financial year 2015-16 and submitted its Bank statement. The assessee also submitted that only an amount of Rs.22,00,000/- was received from M/s. Skylight Distributors Pvt. Limited on 11.02.2016, but the ld. Assessing Officer has not considered the Bank statement filed by the assessee. Therefore, the amount of Rs.22,00,000/- was treated as unexplained money of the assessee and brought to tax under section 69A read with section 115BBE of the Act. 3. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals). ITA No. 1379/KOL/2024 (A.Y. 2016-2017) Logic Infotech Limited 3 4. After considering the submissions of the assessee, the ld. CIT(Appeals) allowed the assessee’s appeal and deleted the addition of Rs.22,00,000/- as made by the ld. Assessing Officer. 5. On being aggrieved, the Revenue preferred an appeal before the ITAT and raised the following issues:- “1. For that, ld. CIT(A) erred in deleting the addition of Rs.22,00,000/- in the form of unexplained money u/s 69A of the I.T. Act, 1961 despite the fact that assessee- company did not satisfactorily establish the identity and creditworthiness of M/s. Pushpanjali Hirise Pvt. Limited and genuineness of transaction with it from which it received funds after layering through M/s. Skylight Distributors Pvt. Ltd. 2. Whether on the fact and in the circumstances of the case, ld. CIT(A), NFAC, New Delhi was incorrect in granting relief and deleted the addition made by the AO without examining the creditworthiness of the entity from which credit to the tune of Rs.22,00,000/- were received. 3. Whether the decision of the ld. CIT(A), NFAC, Delhi is contrary to the judgment of the Hon’ble Division Bench, High Court at Calcutta in ITAT/67/2024 (IA No. GA/2/2024) in the case of Principal Commissioner of Income Tax, Central-2, Kolkata -vs.- BST Infratech Ltd. 6. I have heard both the sides. It was the submission of the ld. Departmental Representative that burden lies on the assessee to establish the source of receipt and also creditworthiness of the investor. He further argued that the assessee failed to explain the source of cash deposit of Rs.22,00,000/-. Therefore, the ld. Assessing Officer made the addition under section 69A of the Act. The ld. CIT(Appeals) wrongly deleted the addition made by the ld. ITA No. 1379/KOL/2024 (A.Y. 2016-2017) Logic Infotech Limited 4 Assessing Officer. Therefore, he pleaded to uphold the order passed by the ld. Assessing Officer. 7. On the other hand, it was the submission of the ld. Counsel for the assessee that the assessee-company has not received any amount from M/s. Pushpanjali Hirise Pvt. Limited during the financial year 2015-16. The assessee also filed Bank statement before the ld. Assessing Officer and explained that there is no such transaction between the assessee-company and M/s. Pushpanjali Hirise Pvt. Limited. He further submitted that the assessee also replied to the show-cause notice issued by the ld. Assessing Officer stating that there is no transaction between the assessee-company and M/s. Pushpanjali Hirise Pvt. Limited. Ld. Counsel further submitted that the ld. Assessing Officer was requested several times by the assessee to give details about the date of transaction, name of the Bank and the transaction between the assessee- company and M/s. Pushpanjali Hirise Pvt. Limited, but ld. Assessing Officer failed to give any details of the transactions, but the ld. Assessing Officer made an addition of Rs.22,00,000/- under section 69A of the Act without any basis. After considering the entire facts of the case, the ld. CIT(Appeals) deleted the addition made by the ld. Assessing Officer and therefore, ld. Counsel for the assessee pleaded to uphold the order passed by the ld. CIT(Appeals). 8. I have perused the material available on record. It is an admitted fact that the ld. Assessing Officer has not brought on record about the date of transaction between assessee-company ITA No. 1379/KOL/2024 (A.Y. 2016-2017) Logic Infotech Limited 5 and M/s. Pushpanjali Hirise Pvt. Limited, in which the amount was deposited, but simply he mentioned in the assessment order that he received credible information from the DDIT (Inv.), Kolkata about the cash credit of Rs.22,00,000/- by the assessee-company from M/s. Pushpanjali Hirise Pvt. Limited. Initial burden lies on the ld. Assessing Officer to establish the nature of transaction and date of transaction. The fact is that there is no transaction between the assessee-company and M/s. Pushpanjali Hirise Pvt. Limited. In the entire assessment proceedings, the ld. Assessing Officer has not mentioned the date of transaction between the assessee and M/s. Pushpanjali Hirise Pvt. Limited. I have also perused the order passed by the ld. CIT(Appeals), wherein he has categorically mentioned his order, as under:- “I have observed that the Ld. AO failed to evaluate the bank statement and totally ignored the submission made by assessee. The assessee repeatedly sought for date of transaction between M/s Pushpanjali Hirise Pvt. Ltd. and assessee because there was no transaction between the alleged company and assessee for the amount mentioned by Ld. AO. This was also supported by bank statement submitted by assessee wherein it was evident that no transaction amounting to Rs.22,00,000/- or any other amount was executed between the assessee and alleged company. In the entire assessment proceedings, the A.O. failed to provide the date of transaction between the assessee and M/s Pushpanjali Hirise Pvt. Ltd., this is because as per para 4 of the assessment order the A.O mentioned the bank details of the alleged company but could not mention the date of transaction. The Ld. A.O. simply failed to establish the connection. Considering the aforesaid facts and other evidences filed before me, I note that the Ld. Assessing Officer was not justified in making an addition of Rs.22,00,000/- u/s.69A of the Act. Hence, the addition made by the A.O. is deleted”. 9. After considering the order passed by the ld. CIT(Appeals), I have no hesitation to come to the conclusion that there is no ITA No. 1379/KOL/2024 (A.Y. 2016-2017) Logic Infotech Limited 6 infirmity in the order passed by the ld. CIT(Appeals). Therefore, it needs no interference. The grounds raised by the Revenue are dismissed. 10. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open Court on 17/03/2025. Sd/- (Duvvuru RL Reddy) Vice-President (KZ) Kolkata, the 17th day of March, 2025 Copies to :(1) Income Tax Officer, Ward-7(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 (2) Logic Infotech Limited, 21/7, Sahapur Colony, New Alipore, Kolkata-700053 (3) CIT(Appeals), NFAC, Delhi; (4) CIT - ; (5) The Departmental Representative; (6) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S. "