ACIT, CC-3(2), Kolkata, Kolkata V. Ritum Jain, Kolkata

ITSSA 36/KOL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4008 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 22-10-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 30-09-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 29-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM BILASH MEENA
• Assessee Lawyers: A K TULSIYAN
• Keywords: Capital receipt
• Section: 143(3); 250; 143(2); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA A BENCH, KOLKATA VIRTUAL COURT HEARING (BEFORE SRI J. SUDHAKAR REDDY, HONBLE ACCOUNTANT MEMBER & SRI S.S. GODARA, HONBLE JUDICIAL MEMBER) IT(SS)A NO. 36/KOL/2019 ASSESSMENT YEAR: 2013-14 ASSTT. COMMISSIONER OF INCOME TAX, CC-3(2), KOLKATA.............................APPELLANT VS. RITUM JAIN..................................RESPONDENT METRO TOWERS 1, HO-CHI-MINH SARANI KOLKATA 700 071 [PAN : ACTPJ 4441 K] APPEARANCES BY: SHRI A.K. TULSIYAN, A/R APPEARED ON BEHALF OF THE ASSESSEE. SHRI RAM BILASH MEENA, CIT D/R, APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : SEPTEMBER 30 TH , 2020 DATE OF PRONOUNCING THE ORDER : OCTOBER 22 ND , 2020 ORDER PER J. SUDHAKAR REDDY, AM :- THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 21, KOLKATA, (HEREINAFTER THE LD.CIT(A)), PASSED U/S. 250 OF THE INCOME TAX ACT, 1961 (THE ACT), DT. 29/03/2019, FOR THE ASSESSMENT YEAR 2012-13. 2. THE ASSESSEE IS AN INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF DETERGENT AND RESALE OF SODA ASH. THE ISSUES THAT ARISE BEFORE US IN THIS REVENUE APPEAL ARE ADJUDICATED AS BELOW:- 3. GROUND NO. 1, IS AGAINST THE ACTION OF THE LD. CIT(A) DELETING THE DISALLOWANCE OF RS.6,14,090/-. THE ASSESSING OFFICER MADE THIS DISALLOWANCE OF INTEREST PAID ON THE GROUND THAT THERE WAS EXCESS PAYMENT OF INTEREST TO A RELATED PARTY. THE LD. CIT(A) HELD THAT THE EXCESS INTEREST WAS JUST 1 % PER ANNUM AND WELL WITHIN TOLERABLE LIMITS. HE DELETED THE ADDITIONS. WE DO NOT FIND ANY INFIRMITY IN THIS FINDING OF THE LD. CIT(A). IN THE RESULT, WE DISMISS GROUND NO. 1 OF THE REVENUE. 4. GROUND NO. 2 IS AGAINST THE DELETION OF DISALLOWANCE BY THE LD. CIT(A) OF AN ADDITION MADE ON ACCOUNT OF DELAY IN DEPOSIT OF EMPLOYEES CONTRIBUTION TO PF & ESI U/S 36 (1)(VA) R.W.S. 2(24)(X) OF THE ACT. THE LD. CIT(A) APPLIED THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. M/S. VIJAY SHREE LTD. [ITA NO. 245 OF 2011, GA NO. 2607 OF 2011] AND CIT VS. REI AGRO LIMITED [ITAT 161 OF 2013, GA 3022 OF 2013] AND ALLOWED THE CLAIM OF THE ASSESSEE. DISMISS THIS GROUND OF THE REVENUE. 5. GROUND NO. 3, 4 & 5 ARE AGAINST THE LD. CIT(A) HOLDING THAT THE SALES TAX INCENTIVE RECEIVED BY THE ASSESSEE FR OM THE GOVT. OF WEST BENGAL AS BEING CAPITAL RECEIPT AND HENCE NO TAXABLE. 5.1. AFTER HEARING RIVAL CONTENTIONS, WE FIND THAT THE ASSESSEE HAS MADE THIS CLAIM FOR THE FIRST TIME BEFORE THE LD. CIT(A) AND THE LD. CIT(A), BY A HONBLE SUPREME COURT IN THE CASE OF ITR 383 AND JUTE CORPORATION OF INDIA VS. CIT [1991] 187 ITR 688 (SC) ADDITIONAL GROUNDS. THIS ADMISSION OF ADDITIONAL GROUNDS IS NOT SPECIFICALLY CHALLENGED BY THE REVENUE. 5.1.1. COMING TO THE MERITS, THE FINDING OF THE LD. CIT(A) INCENTIVE RECEIVED FROM THE GOVERNMENT OF WEST BENGAL THAT THE KOLKATA C BENCH OF THE ITAT, IN THE CASE OF DETERGENTS PVT. LTD. IN IT(SS)A NO. 27 TO 32/KOL/2019, ORDER DT. 20/03/2020, A GROUP CONCERN OF THE ASSESSEE AND THE SAME IN FAVOUR OF THE ASSESSEE 7. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL CONTENTIONS. IT IS CRYSTAL CLEAR FROM THE CIT(A)'S ABOVE EXTRACTED DETAILED DISCUSSION AND THE RELEVANT FA EMERGING FROM THE CASE FILE(S) THAT THE ASSESSEE HAD RAISED BOTH THESE ISSUE(S) IN THE COURSE OF LOWER APPELLATE PROCEEDINGS. WE FURTHER FIND THAT CONTRARY TO THE REVENUE'S CASE THAT ONLY THE LAST ASSESSMENT YEAR INVOLVED SEC. 143(3) PROCEEDINGS, SCRUT ASSESSMENT(S) FOR AYS 2012 SEARCH I.E. 17/18.12.2014 SINCE THE ASSESSING OFFICER HAD ISSUED THE CORRESPONDING SEC. 143(2) NOTICE(S) ON 24.12.2014 AND 08.09.2014; RESPECTIVELY. THE REVENUE'S CASE THAT T HE FORMER FIVE ASSESSMENT YEAR(S) UPTO ASSESSMENT YEAR 2013 UNABATED ASSESSMENT 153A(1)(B) IS NOT FACTUAL CORRECT THEREFORE SINCE ONLY AYS 2009 10 TO 2011- 12 CONTAIN ABATED PROCEEDINGS. THAT BEING THE CASE, WE ARE OF THE OPINION THAT IT TECHNIC AL ARGUMENT CHALLENGING CORRECTNESS OF THE CIT(A)'S ACTION TO HAVE ERRED IN ADMITTING THE ASSESSEE'S ADDITIONAL GROUND TO THIS EFFECT CARRIES NO MERIT IN ASSESSMENT YEARS IN AYS 2012 ASSESSMENT(S) FOR ASSESSI THAT EMANATING FROM THE ALLEGED INCRIMINATING MATERIAL FOUND / SEIZED DURING THE COURSE OF SEARCH. 9. NEXT COMES YET ANOTHER SIGNIFICANT ASPECT ON MERIT AS TO WHETHER THE IMPUGNED SALES TAX INCENTIV E SUBSIDY SUM(S) RECEIVED UNDER NOTIFICATION NO. 1460 DATED 27.05.1994 ISSUED BY THE WEST BENGAL INDUSTRIAL PROMOTION (ASSISTANCE TO INDUSTRIAL UNITS) SCHEME ARE IN THE NATURE OF A CAPITAL OR REVENUE SUBSIDY. WE FIND THIS LATTER ISSUE TO BE NO MORE RES INT PRECEDENTS; INCLUDING THAT OF HON'BLE JURISDICTIONAL HIGH COURT, THAT THIS SUBSIDY GIVES 2 AND ALLOWED THE CLAIM OF THE ASSESSEE. WE FIND NO INFIRMITY IN THIS FINDING. DISMISS THIS GROUND OF THE REVENUE. GROUND NO. 3, 4 & 5 ARE AGAINST THE LD. CIT(A) HOLDING THAT THE SALES TAX INCENTIVE OM THE GOVT. OF WEST BENGAL , AMOUNTING TO RS.1,72,23,509/ AS BEING CAPITAL RECEIPT AND HENCE NO TAXABLE. AFTER HEARING RIVAL CONTENTIONS, WE FIND THAT THE ASSESSEE HAS MADE THIS CLAIM FOR THE FIRST TIME BEFORE THE LD. CIT(A) AND THE LD. CIT(A), BY A PPLYING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. V. CIT [1998] JUTE CORPORATION OF INDIA VS. CIT [1991] 187 ITR 688 (SC) ADDITIONAL GROUNDS. THIS ADMISSION OF ADDITIONAL GROUNDS IS NOT SPECIFICALLY CHALLENGED COMING TO THE MERITS, THE FINDING OF THE LD. CIT(A) HELD THAT THE SALES TAX INCENTIVE RECEIVED FROM THE GOVERNMENT OF WEST BENGAL IS CAPITAL IN NATURE. WE FIND THAT THE KOLKATA C BENCH OF THE ITAT, IN THE CASE OF ACIT, CC- 3(2) VS. SHANTINATH DETERGENTS PVT. LTD. IN IT(SS)A NO. 27 TO 32/KOL/2019, ORDER DT. 20/03/2020, A GROUP CONCERN OF THE ASSESSEE AND HAS CONSIDERED AN IDENTICAL FACTS THE SAME IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER:- 7. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL CONTENTIONS. IT IS CRYSTAL CLEAR FROM THE CIT(A)'S ABOVE EXTRACTED DETAILED DISCUSSION AND THE RELEVANT FA EMERGING FROM THE CASE FILE(S) THAT THE ASSESSEE HAD RAISED BOTH THESE ISSUE(S) IN THE COURSE OF LOWER APPELLATE PROCEEDINGS. WE FURTHER FIND THAT CONTRARY TO THE REVENUE'S CASE THAT ONLY THE LAST ASSESSMENT YEAR INVOLVED SEC. 143(3) PROCEEDINGS, SCRUT ASSESSMENT(S) FOR AYS 2012 -13 AND 2013- 14 WERE ALSO PENDING AS ON THE DATE OF SEARCH I.E. 17/18.12.2014 SINCE THE ASSESSING OFFICER HAD ISSUED THE CORRESPONDING SEC. 143(2) NOTICE(S) ON 24.12.2014 AND 08.09.2014; RESPECTIVELY. THE REVENUE'S CASE HE FORMER FIVE ASSESSMENT YEAR(S) UPTO ASSESSMENT YEAR 2013 UNABATED ASSESSMENT 153A(1)(B) IS NOT FACTUAL CORRECT THEREFORE SINCE ONLY AYS 2009 12 CONTAIN ABATED PROCEEDINGS. THAT BEING THE CASE, WE ARE OF THE OPINION AL ARGUMENT CHALLENGING CORRECTNESS OF THE CIT(A)'S ACTION TO HAVE ERRED IN ADMITTING THE ASSESSEE'S ADDITIONAL GROUND TO THIS EFFECT CARRIES NO MERIT IN ASSESSMENT YEARS IN AYS 2012 -13, 2013-14 AND 2015- 16 SINCE INVOLVED 'ABATED' ASSESSMENT(S) FOR ASSESSI NG NOT ONLY THE INCOME UNDER NORMAL PROVISIONS BUT ALSO THAT EMANATING FROM THE ALLEGED INCRIMINATING MATERIAL FOUND / SEIZED DURING THE 9. NEXT COMES YET ANOTHER SIGNIFICANT ASPECT ON MERIT AS TO WHETHER THE IMPUGNED E SUBSIDY SUM(S) RECEIVED UNDER NOTIFICATION NO. 1460 DATED 27.05.1994 ISSUED BY THE WEST BENGAL INDUSTRIAL PROMOTION (ASSISTANCE TO INDUSTRIAL UNITS) SCHEME ARE IN THE NATURE OF A CAPITAL OR REVENUE SUBSIDY. WE FIND THIS LATTER ISSUE TO BE NO MORE RES INT EGRA SINCE THE CIT(A) HAS TAKEN NOTE OF VARIOUS JUDICIAL PRECEDENTS; INCLUDING THAT OF HON'BLE JURISDICTIONAL HIGH COURT, THAT THIS SUBSIDY GIVES IT(SS)A NO. 36/KOL/2019 ASSESSMENT YEAR: 2013-14 RITUM JAIN WE FIND NO INFIRMITY IN THIS FINDING. HENCE, WE GROUND NO. 3, 4 & 5 ARE AGAINST THE LD. CIT(A) HOLDING THAT THE SALES TAX INCENTIVE , AMOUNTING TO RS.1,72,23,509/ -, AFTER HEARING RIVAL CONTENTIONS, WE FIND THAT THE ASSESSEE HAS MADE THIS CLAIM FOR PPLYING THE DECISION OF THE NATIONAL THERMAL POWER CO. LTD. V. CIT [1998] 229 JUTE CORPORATION OF INDIA VS. CIT [1991] 187 ITR 688 (SC) , ADMITTED THE ADDITIONAL GROUNDS. THIS ADMISSION OF ADDITIONAL GROUNDS IS NOT SPECIFICALLY CHALLENGED THAT THE SALES TAX IS CAPITAL IN NATURE. WE FIND 3(2) VS. SHANTINATH DETERGENTS PVT. LTD. IN IT(SS)A NO. 27 TO 32/KOL/2019, ORDER DT. 20/03/2020, IN THE CASE OF FACTS AND ADJUDICATED 7. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL CONTENTIONS. IT IS CRYSTAL CLEAR FROM THE CIT(A)'S ABOVE EXTRACTED DETAILED DISCUSSION AND THE RELEVANT FA CTS EMERGING FROM THE CASE FILE(S) THAT THE ASSESSEE HAD RAISED BOTH THESE ISSUE(S) IN THE COURSE OF LOWER APPELLATE PROCEEDINGS. WE FURTHER FIND THAT CONTRARY TO THE REVENUE'S CASE THAT ONLY THE LAST ASSESSMENT YEAR INVOLVED SEC. 143(3) PROCEEDINGS, SCRUT INY 14 WERE ALSO PENDING AS ON THE DATE OF SEARCH I.E. 17/18.12.2014 SINCE THE ASSESSING OFFICER HAD ISSUED THE CORRESPONDING SEC. 143(2) NOTICE(S) ON 24.12.2014 AND 08.09.2014; RESPECTIVELY. THE REVENUE'S CASE HE FORMER FIVE ASSESSMENT YEAR(S) UPTO ASSESSMENT YEAR 2013 -14 INVOLVED UNABATED ASSESSMENT 153A(1)(B) IS NOT FACTUAL CORRECT THEREFORE SINCE ONLY AYS 2009 - 12 CONTAIN ABATED PROCEEDINGS. THAT BEING THE CASE, WE ARE OF THE OPINION AL ARGUMENT CHALLENGING CORRECTNESS OF THE CIT(A)'S ACTION TO HAVE ERRED IN ADMITTING THE ASSESSEE'S ADDITIONAL GROUND TO THIS EFFECT CARRIES NO MERIT IN 16 SINCE INVOLVED 'ABATED' NG NOT ONLY THE INCOME UNDER NORMAL PROVISIONS BUT ALSO THAT EMANATING FROM THE ALLEGED INCRIMINATING MATERIAL FOUND / SEIZED DURING THE 9. NEXT COMES YET ANOTHER SIGNIFICANT ASPECT ON MERIT AS TO WHETHER THE IMPUGNED E SUBSIDY SUM(S) RECEIVED UNDER NOTIFICATION NO. 1460 DATED 27.05.1994 ISSUED BY THE WEST BENGAL INDUSTRIAL PROMOTION (ASSISTANCE TO INDUSTRIAL UNITS) SCHEME ARE IN THE NATURE OF A CAPITAL OR REVENUE SUBSIDY. WE FIND THIS LATTER EGRA SINCE THE CIT(A) HAS TAKEN NOTE OF VARIOUS JUDICIAL PRECEDENTS; INCLUDING THAT OF HON'BLE JURISDICTIONAL HIGH COURT, THAT THIS SUBSIDY GIVES RISE TO CAPITAL RECEIPT ONLY. WE ADOPT THE VERY REASONING MUTATIS MUTANDIS AND UPHOLD THE CIT(A)'S FINDINGS UN 6. ON A QUERY FROM THE BENCH, THE LD. D/R, COULD NOT DEMONSTRATE THAT THE SCHEME UNDER WHICH THE SALES TAX INCENTIVE WAS GIVEN TO THE ASSESSEE WAS DIFFERENT FROM THE SCHEME UNDER WHICH SALES TAX INCENTIVE WAS GI FACTS, HE COULD NOT DISTINGUISH THIS CASE FROM THAT OF THE CASE OF PVT. LTD. HENCE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT( BY APPLYING THE PROPOSITION OF LAW LAID DOWN BY THE ITAT, IN THE CASE OF DETERGENTS PVT. LTD. (SUPRA). DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. KOLKATA, THE SD/- [ S. S. GODARA ] JUDICIAL MEMBER DATED : 22.10.2020 {SC SPS} COPY OF THE ORDER FORWARDED TO: 1. RITUM JAIN METRO TOWERS 1, HO-CHI-MINH SARANI KOLKATA 700 071 2. ASSTT. COMMISSIONER OF INCOME TAX, CC 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 3 RISE TO CAPITAL RECEIPT ONLY. WE ADOPT THE VERY REASONING MUTATIS MUTANDIS AND UPHOLD THE CIT(A)'S FINDINGS UN DER CHALLENGE GRANTING RELIEF TO ASSESSEE. ON A QUERY FROM THE BENCH, THE LD. D/R, COULD NOT DEMONSTRATE THAT THE SCHEME UNDER WHICH THE SALES TAX INCENTIVE WAS GIVEN TO THE ASSESSEE WAS DIFFERENT FROM THE SCHEME UNDER WHICH SALES TAX INCENTIVE WAS GI VEN TO SHANTINATH DETERGENTS PVT. LTD. FACTS, HE COULD NOT DISTINGUISH THIS CASE FROM THAT OF THE CASE OF SHANTINATH DETERGENTS HENCE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT( A). WE UPHOLD THE SAME BY APPLYING THE PROPOSITION OF LAW LAID DOWN BY THE ITAT, IN THE CASE OF DETERGENTS PVT. LTD. (SUPRA). HENCE GROUND NOS. 3, 4 & 5 RAISED BY THE REVENUE ARE IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. KOLKATA, THE 22 ND DAY OF OCTOBER, 2020. [ J. SUDHAKAR REDDY ACCOUNTANT MEMBER ASSTT. COMMISSIONER OF INCOME TAX, CC -3(2), KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. ASSISTANT ITAT, KOLKATA BENCHES IT(SS)A NO. 36/KOL/2019 ASSESSMENT YEAR: 2013-14 RITUM JAIN RISE TO CAPITAL RECEIPT ONLY. WE ADOPT THE VERY REASONING MUTATIS MUTANDIS AND DER CHALLENGE GRANTING RELIEF TO ASSESSEE. ON A QUERY FROM THE BENCH, THE LD. D/R, COULD NOT DEMONSTRATE THAT THE SCHEME UNDER WHICH THE SALES TAX INCENTIVE WAS GIVEN TO THE ASSESSEE WAS DIFFERENT FROM THE SHANTINATH DETERGENTS PVT. LTD. . ON SHANTINATH DETERGENTS A). WE UPHOLD THE SAME BY APPLYING THE PROPOSITION OF LAW LAID DOWN BY THE ITAT, IN THE CASE OF SHANTINATH HENCE GROUND NOS. 3, 4 & 5 RAISED BY THE REVENUE ARE SD/- J. SUDHAKAR REDDY ] ACCOUNTANT MEMBER TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES