DCIT, CC-1(4), KOLKATA, Kolkata V. M/s Shradha Tower Pvt. Ltd., Kolkata

ITSSA 57/KOL/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4974 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 31-05-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 01-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G MALLIKARJUNA
• Assessee Lawyers: MANISH TIWARI
• Keywords: Search and seizure; Assessment record
• Section: 153A; 147; 246; 132

Judgement Text

IT(SS)A.NO.55-58/KOL/2016 SHRADDHA TOWER PVT. LTD. A.Y.2007-08,2008-09,2010-11 & 2011-12 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C KOL KATA [BEFORE HONBLE SHRI J.SUDHAKAR REDDY, AM & SHRI S.S.VISWANETHRA RAVI, JM ] IT(SS)A.NOS.55-58/KOL//2016 A.YRS.2007-08, 2008-09, 2010-11 & 2011-12 D.C.I.T., CENTRAL CIRCLE-1(4) -VERSUS- M/S SH RADDHA TOWER PVT. LTD. KOLKATA KOLKATA (PAN: AAICS 7724 G) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI G.MALLIKARJUNA, CIT, DR FOR THE RESPONDENT: SHRI MANISH TIWARI, FCA DATE OF HEARING : 01.10.2018. DATE OF PRONOUNCEMENT : ORDER PER J.SUDHAKAR REDDY, AM: ALL THESE APPEALS ARE FILED BY THE REVENUE AND ARE DIRECTED AGAINST SEPARATE BUT IDENTICAL ORDERS OF THE COMMISSIONER OF INCOME TA X-(A)-20, KOLKATA DATED 28.06.2016. AS THE ISSUES IN ALL THESE APPEALS ARE COMMON, FOR THE SAKE OF CONVENIENCE THEY ARE HEARD TOGETHER AND DISPOSED OF F BY WAY OF A COMMON ORDER. 2. THE ASSESSEE IS A COMPANY AND IS IN THE BUSINES S OF INVESTMENT. THIS BELONGS TO MAHENDRA SETHIA GROUP OF CASES WHERE SEARCH AND SEIZURE OPERATION WAS CONDUCTED U/S 132 OF THE ACT ON 30.11.2012. NOTICE U/S 153A O F THE ACT WAS ISSUED TO THE ASSESSEE. IN RESPONSE, THE ASSESSEE FILED RETURN ON 28.03.2014. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 153A R.W.S.143(3) OF T HE ACT ON 31.03.2015. AGGRIEVED THE ASSESEE CARRIED THE MATTER IN APPEAL. THE FIRST APPELLATE AUTHORITY CALLED FOR A REMAND REPORT. THE AO HAS PREPARED THE REMAND REPOR T AFTER GIVING THE ASSESSEE OPPORTUNITIES AND THE REMAND REPORT WAS FORWARDED T O CIT(A) BY THE ADDITIONAL C.I.T. IN THE REMAND REPORT THE AO STATED AS FOLLOWS : IN VIEW OF THE ABOVE AND AS PER DIRECTION OF THE LD. CIT( A), INSPECTOR ATTACHED TO THIS CHARGE WAS DEPLOYED FOR TRACING SOME OF THE COMPANIES ON TEST CHECK BASIS. THE INSPECTOR HAS STATED IN HIS REPORT THAT ON VERIFICATION OF SOME OF THE ADDRESSES, HE COULD LOCATE THE NAME BOARDS OF SOME OF THE SOURCE COMPANIES DISPLAYED AT THE ADDRESSES. HE ALSO STATED THAT HE COULD SEE BOOKS OF ACCOUNTS OR IT(SS)A.NO.55-58/KOL/2016 SHRADDHA TOWER PVT. LTD. A.Y.2007-08,2008-09,2010-11 & 2011-12 2 SOME OF THE RESPECTIVE SOURCES COMPANIES ON DEMAND TO THE PEOPLE PRESENT THERE. IT IS REVEALED TO THE INSPECTOR THAT IN SOME CASES, THE SOURCE COMPANIES HAS TAKEN TABLE SPACE AGREEMENTS. IN SOME CASES THEY ARC OCCU PYING ON RENTAL BASIS. SUBMISSION OF THE ASSESSEE WAS CONSIDERED. THE REPO RT SUBMITTED BY THE INSPECTOR ALONG WITH EXTRACT OF SUPPORTING DOCUMENT S WAS ALSO CONSIDERED AND PLACED ON RECORD. NO MATERIAL FOUND IN THE ASSESSME NT RECORD WHICH INDICATES THAT EFFORT HAS BEEN GIVEN TO PROVE THE EXISTENCE AND CR EDITWORTHINESS AS SUBMITTED BY THE ASESSEE DURING THIS REMAND PROCEEDINGS . ALL TH E PAPERS. COPY OF DOCUMENTS SUBMITTED DURING. THE REMAND STAGE IN RESPECT OF LO ANS AND ADVANCES TAKEN FROM COMPANIES ARE CAREFULLY CHECKED. FURTHER. THE A/R O F THE ASSESSES CONTENDED THAT THE ASSESSING OFFICER CONSIDERED ONLY THE ADVANCE T AKEN DURING A CERTAIN FINANCIAL YEAR BUT NOT CONSIDERED THE REPAYMENT MADE DURING T HE YEAR. THE CONTENTIONS OF THE ASSESSEE IN THIS REGARD APPEAR TO BE CORRECT. EACH ENTRY OF ADVANCE TAKEN AND GIVEN WAS VERIFIED FROM THE BANK ACCOUNT. THE BALAN CE OF ADVANCE EXISTED AT THE END OF THE FINANCIAL YEAR IS SUFFICIENT TO ACQUIRE ASSETS EXISTED IN THE RIGHT SIDE OF THE BALANCE SHEET IN EACH CASE AND EACH ASSESSMENT YEAR. 3. AFTER CONSIDERING THE REMAND REPORT, THE LD. CIT (A) GRANTED RELIEF TO THE ASSESSEE, AS THE AO ACCEPTED, AFTER DUE VERIFICATIO N, THE GENUINENESS OF THE CLAIM OF THE ASSESSEE. 4. AGGRIEVED THE REVENUE IS BEFORE US ON THE FOLLOW ING GROUNDS OF APPEAL :- 1. THAT THE FACT AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT{APPEALS) HAS ERRED IN LAW AS WELL AS IN FACT IN ADMITTING ADDITI ONAL EVIDENCE IN VIOLATION OF PROVISIONS OF RULE 46A OF THE I.T.ACT, 1961. 2. THE LD. CIT(A) ERRED IN LAW AS WELL AS ON FACTS BY DELETED THE ADDITION OF UNDISCLOSED INCOME TO RS.L,38,50,000/- RELYING ON T HE ASSESSEE'S SUBMISSION AND DISREGARDING THE REASONED AND DETAILED ORDER OF THE OF THE ASSESSING OFFICER AND THE COMMENTS OF THE ADDL. CIT DURING THE REMAND PRO CEEDING. 3. THAT ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER OF THE LD. CIT{A) BE VACATED AND THE ORDER OF THE ASSESSING OF FICER BE RESTORED. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER/ O R AMEND ANY OF THE GROUNDS OF APPEAL DURING THE COURSE OF HEARING. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTE D THAT, IN THE REMAND PROCEEDINGS, THE AO HAS DEPUTED AN INSPECTOR OF INC OME TAX WHO COULD NOT VERIFY THE IDENTITY OF THE COMPANIES. IT IS HIS CASE THAT THE ENTIRE MATTER SHOULD BE RESTORED TO THE IT(SS)A.NO.55-58/KOL/2016 SHRADDHA TOWER PVT. LTD. A.Y.2007-08,2008-09,2010-11 & 2011-12 3 FILE OF THE AO FOR VERIFICATION AS TO WHETHER THE C OMPANIES IN QUESTION ARE IN EXISTENCE OR NOT. ON A QUERY FROM THE BENCH AS TO WHETHER AN ASSESSING OFFICER COULD FILE AN APPEAL WHEN HIS FINDING IN THE REMAND REPORT HAVE B EEN ACCEPTED BY THE LD CIT(A), THE LD. DR SUBMITTED THAT, IT CANNOT BE ASCERTAINED WIT H CERTAINTY BY THE INSPECTOR OF THE INCOME TAX, THAT THE COMPANIES IN QUESTION ARE ACTU ALLY IN EXISTENCE AT THE ADDRESS GIVEN BY THEM. HE VEHEMENTLY CONTENDED THAT IDENTIT Y OF THE CREDITOR WAS NOT PROVED AND THE ADDITION WAS PROPERTY MADE BY THE AO AND TH AT THE LD. CIT(A) WITHOUT PROPERLY CONSIDERING THE FACTS HAS GRANTED RELIEF. HE PLEADED THAT THE ISSUE SHOULD BE RESTORED TO THE AO FOR FRESH ADJUDICATION. 6. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HA ND, OBJECTED TO THE SUBMISSIONS AND SUBMITTED THAT THE LD. CIT(A) HAD BASED HIS OR DER, ON THE REMAND REPORT GIVEN BY THE AO. HE POINTED OUT THAT IN THE REMAND REPORT TH E AO HAD CONSIDERED ALL THE EVIDENCES GIVEN BY THE ASSESSEE AND HAS CONCLUDED T HAT THE CONTENTIONS OF THE ASSESSEE ARE CORRECT. HE SUBMITTED THAT THE AO CANNOT FILE A N APPEAL AGAINST THE FACTUAL FINDINGS IN HIS OWN REMAND REPORT. HE ARGUED THAT, AS THE C IT(A) GRANTED RELIEF BASED ON REMAND REPORT OF THE AO, AN APPEAL BY THE AO CANNO T BE MAINTAINED AGAINST THE SAME. FOR THIS PROPOSITION HE RELIED ON THE FOLLOWI NG DECISIONS :- I)SMT. B.JAYALAKSHMI VS ACIT, SALARY CIRCLE-II, CHE NNAI [2018] 96 TAXMANN.COM 486 (MADRAS) II)ACIT VS R.P.G.CREDIT & CAPITAL LTD. E BENCH I TA NO.4688-46590/DEL/2012 ORDER DATED 07.08.2015. 7. ON MERITS HE SUBMITTED THAT THE ASSESSEE HAS DIS CHARGED THE ONUS THAT LAYS ON IT AND THAT THE IDENTITY OF THE COMPANY IS EVIDENT FRO M THE REGISTRATION CERTIFICATE GRANTED BY THE REGISTRAR OF COMPANIES AND THE PLEA THAT THE INSPECTOR OF THE INCOME TAX HAS NOT PROPERLY CONDUCTED PHYSICAL VERIFICATION OF THE ADDRESS, IS WRONG. HE POINTED OUT THAT THE AO HAS STATED IN THE REMAND REPORT THAT HE HAS CAREFULLY CHECKED ALL THE PAPERS AND COPY OF THE DOCUMENTS SUBMITTED BY THE ASSESSEE AND HAS COME TO THE CONCLUSION THAT THE CONTENTIONS OF THE ASSESSEE ARE CORRECT. T HE ASSESSEE SUBMITS THAT THE ORDER OF THE CIT(A) SHOULD BE UPHELD AND THE APPEALS OF THE REVENUE BE DISMISSED. IT(SS)A.NO.55-58/KOL/2016 SHRADDHA TOWER PVT. LTD. A.Y.2007-08,2008-09,2010-11 & 2011-12 4 8. HEARD RIVAL CONTENTIONS. ON A CAREFUL CONSIDERAT ION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, ON PERUSAL OF THE DOCUME NTS ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW WE HOLD AS FOLLOWS :- THE AO IN HIS REMAND REPORT HAS STATED THAT HE HAS VERIFIED ALL THE DOCUMENTS AND EVIDENCES FURNISHED BY THE ASSESSEE IN SUPPORT OF ITS CLAIMS. NO ADVERSE OBSERVATIONS WERE MADE BY THE AO IN THE REMAND REPO RT. THE CLAIM OF THE ASSESSEE WAS ACCEPTED AS CORRECT. UNDER THE CIRCUMSTANCES, T HE LD. CIT(A) BASED ON THIS REMAND REPORT BY THE A.O, GRANTED RELIEF IN THIS C ASE. THE LD. CIT(A) HELD AS FOLLOWS :- I HAVE CONSIDERED THE FINDING OF THE AO IN THE AS SESSMENT ORDER AS WELL AS IN THE REMAND REPORT ALONG WITH THE WRITTEN SUBMISSION FILED BY THE AR DURING THE APPELLATE PROCEEDINGS, I HAVE ALSO CONSIDERED COMME NTS OF THE ADDL.CIT ON THE REMAND REPORT AND THE WRITTEN SUBMISSION FILED BY T HE AR ON SUCH COMMENTS AS WELL. I FIND THAT THE AO HIMSELF HAS REPORTED IN TH E REMAND REPORT THAT 'INSPECTOR ATTACHED TO HIS(THIS) CHARGE WAS DEPLOYED FOR TRACI NG SOME OF THE COMPANIES ON TEST CHECK BASIS. THE INSPECTOR HAS STATED IN HIS R EPORT THAT ON VERIFICATION OF SOME OF THE ADDRESSES, HE COULD LOCATE THE NAME BOARDS O F SOME OF THE SOURCE COMPANIES DISPLAYED AT THE ADDRESSES. HE ALSO STATE D THAT HE COULD SEE BOOKS OF ACCOUNTS OF SOME OF THE RESPECTIVE SOURCES COMPANIE S ON DEMAND TO THE PEOPLE PRESENT THERE, IT IS REVEALED TO THE INSPECTOR THAT IN SOME CASES, THE SOURCE COMPANIES HAS TAKEN TABLE SPACE AGREEMENTS. IN SOME CASES THEY ARE OCCUPYING ON RENTAL BASIS. SUBMISSION OF THE ASSESSEE WAS CON SIDERED, THE REPORT SUBMITTED BY THE INSPECTOR OR ALONG WITH EXTRACT OF SUPPORTIN G DOCUMENTS WAS ALSO CONSIDERED AND PLACED ON RECORD. NO MATERIAL (IS) F OUND IN THE ASSESSMENT RECORD WHICH INDICATES THAT EFFORT HAS BEEN GIVEN TO PROVE THE EXISTENCE AND CREDITWORTHINESS AS SUBMITTED BY THE ASSESSEE DURIN G THIS REMAND PROCEEDINGS. ALL THE PAPERS, COPY OF DOCUMENTS SUBMITTED DURING THE REMAND STAGE IN RESPECT OF LOANS AND ADVANCES TAKEN FROM COMPANIES ARE CARE FULLY CHECKED. FURTHER, THE AR OF THE ASSESSEES CONTENDED THAT THE ASSESSING OF FICER CONSIDERED ONLY THE ADVANCE TAKEN DURING A CERTAIN FINANCIAL YEAR BUT N OT CONSIDERED THE REPAYMENT MADE DURING THE YEAR. THE CONTENTIONS OF THE ASSESS EE IN THIS REGARD APPEAR TO BE CORRECT. EACH ENTRY OF ADVANCE TAKEN AND GIVEN WAS VERIFIED FROM THE BANK ACCOUNT: THE BALANCE OF ADVANCE EXISTED AT THE END OF THE FINANCIAL YEAR IS SUFFICIENT TO ACQUIRE ASSETS EXISTED IN THE RIGHT S IDE OF THE BALANCE SHEET IN EACH CASE AND EACH ASSESSMENT YEAR'. FROM THE REMAND REPORT OF THE AO, IT IS CLEAR THAT THE AO HAD ACCEPTED AFTER DUE VERIFICATION, THE EXISTENCE AND CREDITWORTHINESS OF COMPANIES WHICH HAVE GIVEN ADVANCE TO THE ASSESSEE. THE AO HAS ALSO MADE INVES TIGATION AND GIVEN HIS IT(SS)A.NO.55-58/KOL/2016 SHRADDHA TOWER PVT. LTD. A.Y.2007-08,2008-09,2010-11 & 2011-12 5 FINDINGS THAT EACH ENTRY OF ADVANCE TAKEN AND GIVEN WAS VERIFIED FROM THE BANK ACCOUNT. FROM THE REPORT IT IS ALSO CLEAR THAT THE BALANCE OF ADVANCE EXISTED AT THE END OF THE FINANCIAL YEAR WAS SUFFICIENT TO ACQUIRE ASSETS EXISTING IN THE RIGHT SIDE OF THE BALANCE SHEET IN EACH CASE AND IN EACH ASSES SMENT YEAR. KEEPING IN VIEW THE CATEGORICAL FINDINGS GIVEN BY THE AO AFTER DUE VERIFICATION OF PAPERS AND DETAILS FILED AND AFTER PROPER INVESTIGATION AND RE PORT BY THE INSPECTOR ATTACHED TO THE AO IN THE REMAND PROCEEDINGS, THE ISSUE INVOLVE D IN THIS CASE HAS BEEN ADEQUATELY DISCUSSED AND ELABORATED BY THE AO. ACCO RDINGLY ASSESSEE'S APPEAL ON GROUND NO 3 IS ALLOWED. 9. ON THESE FACTS THE ISSUE IS WHETHER THE REVENUE COULD AT ALL FILE AN APPEAL BEFORE THE TRIBUNAL. THE HONBLE MADRAS HIGH COURT IN THE CASE OF SMT.B.JAYALAKSHMI VS ACIT (SUPRA HELD AS FOLLOWS : - SECTION 246 OF THE INCOME-TAX ACT, 1961 - COMMISSI ONER (APPEALS) - APPEALABLE ORDERS (REMAND REPORT) - ASSESSMENT YEARS 1995-96 T O 1997-98 - FOR RELEVANT YEAR, ASSESSMENT ORDER WAS PASSED UNDER SECTION 143 (1) - SUBSEQUENTLY, ASSESSING OFFICER REOPENED ASSESSMENT UNDER SECTION 147 AND MADE ADDITION BY TREATING AGRICULTURAL INCOME OF ASSESSEE AS NON-AGR ICULTURAL - COMMISSIONER (APPEALS) CALLED FOR REMAND REPORT - ASSESSING OFFI CER SUBMITTED REMAND REPORT AFTER ENQUIRY AND STATED THEREIN, THAT ASSESSEE WAS CARRYING ON AQRICULTURAL ACTIVITY AND, THUS, SHE WAS EARNING AGRICULTURAL IN COME THEREOF - GOMMISSIONER (APPEALS) ON BASIS OF SAID REMAND REPORT, ALLOWED C LAIM OF AGRICULTURAL INCOME OF ASSESSEE - HOWEVER, TRIBUNAL DISALLOWED SAID CLA IM OF ASSESSEE WITHOUT TAKING INTO CONSIDERATION THAT ORDER ALLOWING ASSESSEE'S A PPEAL BY COMMISSIONER (APPEALS) WAS BASED UPON REMAND REPORT - WHETHER RE VENUE WAS NOT ENTITLED TO FILE AN APPEAL BEFORE TRIBUNAL AGAINST ORDER OF COM MISSIONER (APPEALS), WHICH WAS BASED UPON A REMAND REPORT - HELD, YES [PARAS 1 9, 23 AND 24] [IN FAVOUR OF ASSESSEE/MATTER REMANDED] CIRCULARS & NOTIFICATIONS: CIRCULAR NO. 21 OF 2015, DATED 10-12-2015 10. THE E BENCH OF DELHI ITAT IN THE CASE OF ACIT VS R.P.G.CREDIT & CAPITAL LTD. (SUPRA) HAD TAKEN A SIMILAR VIEW. 11. APPLYING THE PROPOSITION OF LAW LAID DOWN IN TH ESE CASE LAWS TO THE FACTS OF THE CASE, WE HOLD THAT THE AO CANNOT FILE AN APPEAL AGA INST HIS OWN FACTUAL FINDING GIVING IN THE REMAND REPORT. IT(SS)A.NO.55-58/KOL/2016 SHRADDHA TOWER PVT. LTD. A.Y.2007-08,2008-09,2010-11 & 2011-12 6 12. BE AS IT MAY, THE LD. DR COULD NOT BRING OUT AN Y MATERIAL TO CONTROVERT THE FACTUAL FINDINGS GIVEN IN THE REMAND REPORT OF THE AO. THUS ON THIS GROUND ALSO THE APPEAL OF THE REVENUE FAILS. 13. IN VIEW OF THE ABOVE DISCUSSION ALL THE FOUR AP PEALS ARE HEREBY DISMISSED. 14. IN THE RESULT ALL THE FOUR APPEALS OF THE REVEN UE ARE DISMISSED. O RDER PRONOUNCED IN THE COURT ON 24.10.2018. SD/- SD/- [S.S.VISWANETHRA RAVI] [ J.SUDHAKAR REDDY ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 24.10.2018. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1.M/S SHRADDHA TOWER PVT. LTD., 14, N.S.ROAD, 3 RD FLOOR, ROOM NO.304, KOLKATA- 700001. 2. D.C.I.T., CENTRAL CIRCLE-1(4), KOLKATA. 3. C.I.T.(A)- 20, KOLKATA 4. C.I.T-1, KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O, ITAT KOLKATA BENCHES IT(SS)A.NO.55-58/KOL/2016 SHRADDHA TOWER PVT. LTD. A.Y.2007-08,2008-09,2010-11 & 2011-12 7