M/s Global Capitalink Ltd, Kolkata V. A.C.I.T CC - XXVII,kolkata, Kolkata

ITSSA 52/KOL/2013

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2423 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 4 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 26-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 20-07-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 25-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUKHAMAYA HALDER AR SHRI
• Assessee Lawyers: PASS KOLKATA
• Keywords: Income from undisclosed sources; Share purchase agreement; Retraction
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER IT (SS) A NO. 52 / KOL / 2013 ASSESSMENT YEAR:2008-09 M/S GLOBAL CAPITAL INK LTD. 19, BIPLABI ANUKUL CHANDRA STREET, KOLKATA-700 072 [ PAN NO.AAACG 9704 A ] V/S . ASSISTANT COMMISSIONER OF INCOME TAX, CC- XXVII, AAKAR BHWAN PURBA, CENTRAL CIRCLE, 110, SHANTI PALLI,E.M. BY-PASS KOLKATA-700 103 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI SUKHAMAYA HALDER, AR /BY RESPONDENT SHRI G. MALLIKERJUNA, CIT-DR /DATE OF HEARING 20-07-2016 /DATE OF PRONOUNCEMENT 26-08-2016 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF ORDE R OF COMMISSIONER OF INCOME TAX (APPEALS)-II, KOLKATA IN APPEAL NO.202/C C-XXVII/CIT(A)C-II/11-12 DATED 24.01.2012. ASSESSMENT WAS FRAMED BY ACIT, CE NTRAL CIRCLE-XXVII, KOLKATA U/S 153A/143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 23.12.2011 FOR A SSESSMENT YEAR 2008-09. 2. AT THE OUTSET, LD. AR OF ASSESSEE-COMPANY DREW O UR ATTENTION THAT THE APPEAL IS BARRED BY LIMITATION FOR JUST 23 DAYS DEL AY IN FILING THE APPEAL WHICH IS EXPLAINED AS OWING TO BADLY ENGAGEMENT WITH IMPORTA NT AND UNAVOIDABLE BUSINESS AFFAIRS OF THE ASSESSEE-COMPANY OF THE DIR ECTOR AS HE WAS LOOKING IT(SS)A NO.52/KOL/2013 A.Y. 200 8-09 M/S GLOBAL CAPITAL INK LTD. VS. ACIT, CC-X XVII, KOL. PAGE 2 AFTER THE APPEAL MATTER. CONSIDERING THE REASONS GI VEN, WE ADMIT IT FIT TO CONDONE THE DELAY IN FILING THE APPEAL AND PROCEED FOR HEARING THE APPEAL. SHRI SUKHAMAYA HALDER, LD. AUTHORIZED REPRESENTATIV E APPEARED ON BEHALF OF ASSESSEE AND SHRI G. MALLIKERJUNA, LD. DEPARTMENTAL REPRESENTATIVE APPEARED ON BEHALF OF REVENUE. 3. THE GROUNDS RAISED BY THE ASSESSEE PER ITS APPEA L ARE AS UNDER:- (1). THAT IN THE FACTS, DEVELOPMENT, CIRCUMSTANCES OF CASE AS WELL AS UNDER THE LAW, LEARNED C.I.T.(A) WAS NOT JUSTIFIED IN UPHOLDING THE VALIDITY OF DISCLOSURE OF INCOME BY AUTHORISED RE PRESENTATIVE, SRI PRAKASH SARAF, IN THE ABSENCE ANY SPECIFIC AUTHORIZ ATION BY THE APPELLANT-COMPANY. (2) THAT IN THE FACTS, DEVELOPMENT, CIRCUMSTANCES O F THE CASE AS WELL AS UNDER THE LAW LEARNED A.O ACIT-CC-XXVII, KOL. ERRED IN TREATING THE DEPOSITS OF THE RS.2500000 (TWENTY FIVE LACS) IN TH E BANK AS INCOME, WHEN THE SOURCE OF SUCH DEPOSITS WERE GENUINELY EXP LAINED WITH SUPPORTING MATERIAL EVIDENCE, ATTRIBUTING IT TO THE UNAUTHORIZED STATEMENT EXTRACTED FROM AUTHORISED REPRESENTATIV E IN THE ASSTT. PROCEEDINGS. (3) THAT THE APPELLANT CRAVES LEAVE TO ADDUCE, MODI FY, REVISE, ALTER, AMEND, RESCIND, ANY OF THE GROUND(S) IN COURSE OF P ROCEEDINGS BEFORE THE HONOURBLE I.T.A.T.,KOLKATA. 4. THE INTERCONNECTED ISSUE RAISED BY THE ASSESSEE IN THIS APPEAL IS THAT CIT(A) HAS ERRED IN UPHOLDING THE DECISION OF AO BY SUSTAINING THE ADDITION OF RS. 25 LACS WHERE THE AUTHORISED REPRESENTATIVE HAS MADE THE DISCLOSURE OF INCOME WITHOUT ANY SPECIFIC AUTHORISATION AND ALL T HE SUPPORTING DOCUMENTS WERE SUBMITTED AT THE TIME OF ASSESSMENT. 4.1 THE FACTS IN BRIEF ARE THAT THERE WAS A SEARCH CONDUCTED IN THE PREMISES OF BADALIA GROUP ON 10.10.2009 AND SURVEY OPERATION S WERE CONDUCTED ON THE TWO INDIVIDUALS NAMELY MR. M.M. DAGA AND I.C. BAID ON 10-10-2009 WHICH LATER WAS CONVERTED INTO SEARCH OPERATIONS. THESE T WO INDIVIDUALS WERE ASSOCIATED WITH BADALIA GROUP. DURING THE SEARCH OPERATIONS VARIOUS BANK IT(SS)A NO.52/KOL/2013 A.Y. 200 8-09 M/S GLOBAL CAPITAL INK LTD. VS. ACIT, CC-X XVII, KOL. PAGE 3 ACCOUNTS WERE FOUND INCLUDING THE BANK ACCOUNT OF T HE PRESENT ASSESSEE BEARING ACCOUNT NO. 03822320007986 MAINTAINED WITH HDFC BANK, G.C. AVENUE, KOLKATA. SHRI M.M. DAGA ON DEPOSITION UNDER SECTION 131 OF THE ACT ADMITTED THAT HE IS ENGAGED IN THE BUSINESS OF PROV IDING ACCOMMODATING ENTRIES BY ISSUING CHEQUES IN LIEU OF CASH. DURING THE YEAR UNDER CONSIDERATION IT WAS FOUND THAT ASSESSEE HAS RECEIVED A SUM OF RS . 25 LAKH FROM YASHVI ENTERPRISES ON DIFFERENT DATES. ASSESSEE HAS JUSTIF IED THE TRANSACTION OF MONEY RECEIPT BY STATING THAT THE SHARES WERE SOLD TO M/S YASHVI ENTERPRISES. THE ASSESSEE WAS CONFRONTED WITH STATEMENT RECORDED U/S 131 OF THE ACT BUT THE AR FOR THE ASSESSEE FAILED TO REBUT THE SAME. HOWEVER, THE AO OBSERVED IN HIS ORDER THAT THE AR OF THE ASSESSEE HAS CONCED ED THE UNDISCLOSED INCOME OF RS. 25 LACS AND ACCORDINGLY OFFERED FOR T AX. ACCORDINGLY THE AO HAS ADDED BACK RS. 25 LACS TO THE TOTAL INCOME OF THE A SSESSEE. 5. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO LD. CI T(A). THE ASSESSEE BEFORE THE LD. CIT(A) SUBMITTED THAT THE AMOUNT WAS RECEIVED ON ACCOUNT OF SALE OF SHARES TO YASHVI ENTERPRISES. THESE SHARES WERE BOUGHT BY THE ASSESSEE IN FY 2006-07 FROM CHARBHUJA SECURITIES PV T. LTD. THE SHARE APPLICATION MONEY PAID BY THE ASSESSEE WAS DULY REF LECTING IN ITS BOOKS OF ACCOUNTS. THE ASSESSEE ALSO SUBMITTED THAT THE AR W AS NOT AUTHORIZED TO DISCLOSE THE INCOME AND THEREFORE IT IS NOT BINDING . MR. DAGA MAY BE INDULGED IN ANY MALPRACTICES BUT ASSESSEE HAD ONLY THIS LIMI TED TRANSACTION WITH HIM. ASSESSEE HAS SOLD THESE SHARES TO YASHVI ENTERPRISE S IN FY 2007-08 WHILE THE ASSESSMENT HAS BEEN DONE IN THE FY 2010-11 AND THEREFORE THERE IS POSSIBILITY THAT THE CONCERN MIGHT HAVE CHANGED THE ITS OFFICE LOCATION. SO IT IS NOT POSSIBLE FOR THE ASSESSEE TO LOCATE YASHVI ENTE RPRISES. MR. DAGA HAS NO WHERE MENTIONED THAT HE HAS RECEIVED ANY MONEY FROM THE ASSESSEE- COMPANY. HOWEVER, LD CIT(A) HAS UPHOLD THE ORDER OF AO BY OBSERVING THAT SUMMON WAS ISSUED TO THE ASSESSEE AND DIRECTOR OF T HE COMPANY APPEARED BUT HE WAS NOT ABLE TO EXPLAIN ANY OF THE CREDIT EN TRIES AND BALANCE LYING IN THAT BANK ACCOUNT. BEING THE DIRECTOR OF THE COMPAN Y IT IS NOT POSSIBLE THAT HE IT(SS)A NO.52/KOL/2013 A.Y. 200 8-09 M/S GLOBAL CAPITAL INK LTD. VS. ACIT, CC-X XVII, KOL. PAGE 4 WAS NOT AWARE OF THIS TRANSACTION. HE FILED NO OBJE CTION AND GIVEN HIS CONSENT TO SEIZE THE ACCOUNT. YASHVI ENTERPRISE WAS NOT IN EXISTENCE. THE INSPECTOR COULD NOT LOCATE IT AT THE GIVEN ADDRESS. ASSESSEE FAILED TO PRODUCE THE DOCUMENTS LIKE COPY OF SHARE APPLICATION FORMS AND COPY OF ALLOTMENT LETTER, XEROX OF SHARE CERTIFICATES ISSUED BY IT. THE ASSES SEE HAS NOT DECLARED THE TRANSACTION FOR THE SALE OF SHARES OF M/S CHARBHUJA SECURITIES PVT. LTD IN ITS PROFIT & LOSS ACCOUNT OR IN COMPUTATION OF INCOME. THE LD. CIT(A) ALSO FIND A LOT OF DEFECTS IN THE DOCUMENTS IN SUPPORT OF THE TRANS ACTIONS OF THE SALES OF THE SHARES. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE ASSESSEE CAME IN SECOND APPEAL BEFORE US. 6. BEFORE US LD. AR SUBMITTED PAPER BOOK WHICH IS R UNNING PAGES FROM 1 73 AND STATED THAT ASSESSEE NEVER AUTHORIZED THE CO UNSEL TO MAKE THE DISCLOSURE OF RS.25 LAKHS. LD. AR IN SUPPORT OF ITS CLAIM HAS SUBMITTED A CERTIFICATE FROM THE COUNSEL AND DECLARATION FROM T HE DIRECTOR WHICH IS PLACED ON PAGES 12 AND 35 OF THE PAPER BOOK. LD. AR ON MER IT OF THE CASE DREW OUR ATTENTION ON PAGES 14 TO 21 OF THE PAPER BOOK WHERE THE NECESSARY DETAILS FOR THE SALE OF SHARE TO M/S YASHVI ENTERPRISES ALONG W ITH THE COPIES OF CHEQUE WERE PLACED. 7. ON THE OTHER HAND, LD. DR SUBMITTED THAT THE COU NSEL OF ASSESSEE HAS MADE DISCLOSURE AS AUTHORIZED BY THE ASSESSEE. THE ASSESSEE RETRACTED FROM THE DISCLOSURE OF THE STATEMENT OF THE COUNSEL AFTE R PASSING THE ASSESSMENT ORDER. THE ADDRESS OF THE M/S YASHSVI ENTERPRISES W AS NEVER LOCATED BY THE INSPECTOR OF INCOME TAX. HE RELIED ON THE ORDER OF AUTHORITIES BELOW. 8. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FOREGOING D ISCUSSION, WE FIND THAT THE ADDITION WAS MADE BY AO AND SUBSEQUENTLY CONFIRMED BY LD. CIT(A) ON THE IT(SS)A NO.52/KOL/2013 A.Y. 200 8-09 M/S GLOBAL CAPITAL INK LTD. VS. ACIT, CC-X XVII, KOL. PAGE 5 BASIS OF DISCLOSURE STATEMENT GIVEN BY THE COUNSEL OF THE ASSESSEE. BESIDES THE ABOVE, THE PARTY TO WHOM SHARES WERE SOLD WAS N OT TRACEABLE. THE DIRECTOR OF THE COMPANY ALSO COULD NOT EXPLAIN THE ENTRIES REFLECTING IN THE BANK STATEMENTS AT THE TIME OF ASSESSMENT. FROM THE FACTS, WE FIND THAT IT WAS THE DUTY OF ASSESSEE TO PROVIDE SUFFICIENT AND CORR OBORATIVE EVIDENCE IN SUPPORT OF ITS TRANSACTION BUT IN OUR CONSIDERED VI EW ASSESSEE HAS FAILED TO DO SO. WE ALSO FIND THAT THE FINDINGS OF THE LOWER AUT HORITIES ARE VERY CLEAR THAT THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS D ULY ACCEPTED THE INCOME FROM UNDISCLOSED SOURCES AT THE TIME OF ASSESSMENT. THE RETRACTION FROM THE STATEMENT GIVEN BY THE AUTHORIZED REPRESENTATIVE FO R THE DISCLOSURE OF INCOME OF RS. 25,00,000.00 DOES NOT CHANGE THE FACTUAL POS ITION AFTER CONSIDERING THE CIRCUMSTANTIAL EVIDENCE. IN VIEW OF THE ABOVE FACTS AND TOTALITY OF THE CASE, WE FIND NO REASON TO INTERFERE IN THE ORDER OF LD. CIT (A) AND THIS GROUND OF ASSESSEE IS DISMISSED. 9. IN THE RESULT, ASSESSEES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 26 /08/2016 SD/- SD/- ( !') ( !') (N.V.VASUDEVAN) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP $!% &- 26 / 08 /201 6 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-M/S GLOBAL CAPITAL INK LTD. 19, BIPLABI ANUKUL CHANDRA ST-KOL-72 2. / RESPONDENT-ACIT, CC-XXVII. 110. SHANTI PALLI, E. M BY-PAS, KOL-103 3. %.%/0 1 1 2 / CONCERNED CIT KOLKATA 4. 1 1 2- / CIT (A) KOLKATA 5. 567 /0, 1 /0 , / DR, ITAT, KOLKATA 6. 7:; <= / GUARD FILE. BY ORDER/ 1! , /TRUE COPY/ / % 1 /0 ,