DCIT, CC-VI, Kolkata, Kolkata V. M/s. Maithan Ispat Ltd., Kolkata

ITSSA 95/KOL/2011

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7610 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-02-2012
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 06-06-2011
• Court: TRIBUNAL
• Department Lawyers: D R SINDHAL
• Assessee Lawyers: S K TULSIYAN
• Keywords: Opportunity of being heard; Principle of natural justice; Block assessment; Retraction

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH A, KOLKATA () BEFORE , , , , , SHRI MAHAVIR SINGH, JUDICIAL MEMBER. /AND . .. . ! ! ! !. .. . , '# SHRI C.D.RAO, ACCOUNTANT MEMBER $%& $%& $%& $%& ' ' ' ' / IT(SS)A NO . 95/KOL/2011 () *+/ ASSESSMENT YEAR : 2005-06 (-. / APPELLANT ) D.C.I.T., CENTRAL CIRCLE-VI, KOLKATA - ( - - VERSUS - . (01-./ RESPONDENT ) M/S.MAITHAN ISPAT LTD., KOLKATA (AADCM 7360 B). -. 2 3 '/ FOR THE APPELLANT: SHRI D.R.SINDHAL 01-. 2 3 '/ FOR THE RESPONDENT : SHRI S.K.TULSIYAN 4(5 2 !# /DATE OF HEARING : 03.01.2012. 6* 2 !# /DATE OF PRONOUNCEMENT : 29.02.2012. '7 / ORDER ( (( ( . .. . ! ! ! !. .. . ) )) ), , , , '# PER SHRI C.D.RAO, AM THE ABOVE APPEAL FILED BY REVENUE IS AGAINST ORDER DATED 25.03.2011 OF THE LD.CIT(A)-CENTRAL-II, KOLKATA PERTAINING TO A.YR. 2 005-06. 2. AT THE TIME OF HEARING BEFORE US THE LD. COUNSE L APPEARING ON BEHALF OF ASSESSEE SUBMITTED THAT THE FACTS INVOLVED IN THIS CASE ARE EXACTLY SIMILAR TO THAT OF ONE IN THE CASE OF DCIT.CC-VI, KOLKATA VS M/S.MAITHAN ALLOYS L IMITED WHEREIN THIS TRIBUNAL IN ITA NOS.269-273/KOL/2011 VIDE ORDER DATES 29.11. 2011 HAS DISMISSED THE APPEAL OF THE REVENUE. THEREFORE, BEING FACTS AND CIRCUMST ANCES SIMILAR TO THAT OF THE ABOVE HE REQUESTED THAT THIS APPEAL OF THE REVENUE MAY AL SO BE DISMISSED. 2 3. ON THE OTHER HAND, THE LD. DR APPEARING ON BEHA LF OF THE REVENUE COULD NOT CONTRACT THE ABOVE SUBMISSIONS OF THE LD. COUNSEL F OR ASSESSEE. 4. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CARE FUL PERUSAL OF MATERIALS AVAILABLE ON RECORD, IT IS OBSERVED THAT ON SIMILAR FACTS AND CIRCUMSTANCES IN THE CASE OF SISTER CONCERN M/S. MAITHAN ALLOYS LIMITED THIS TRIBUNAL HAS CONFIRMED THE ACTION OF THE LD. CIT(A) BY OBSERVING AS UNDER : 14. THE AUDITED BOOKS OF ACCOUNTS AND INCOME-TAX RETURNS FOR ALL THE YEARS FOR ALL THE PARTIES I.E. LOAN CREDITORS AND SHARE APPLICANT COMPANIES WERE ALSO DULY FILED BEFORE THE ASSESSING OFFICER IN WHICH THE ABOVE SUB JECT LOAN TRANSACTION AND SHARE APPLICATION INCLUDING ALLOTMENTS WERE DISCLOSED. TH E ASSESSING OFFICER HAS NOT FOUND ANY CONTRARY MATERIAL TO THE EXPLANATION AND AS PER THE DETAILS AVAILABLE IN THE BOOKS OF ACCOUNTS AND INCOME TAX RETURNS OF THE PARTIES. FURTHER, FOR ALLOTMENT OF SHARES FORM NO.2 WHICH IS THE REQUIREMENT TO BE FILED BY T HE ASSESSEE-COMPANY WITH REGISTRAR OF COMPANIES IS ALSO AVAILABLE BEFORE THE ASSESSING OFFICER. THE LIST OF ALLOTTEES DETAILS WERE ALSO AVAILABLE, THAT BEING T HE CASE, THE LD. CIT(A)S FINDINGS THAT ASSESSEE HAS DISCHARGED THE BURDEN IS QUITE JU STIFIED. 15. COMING TO THE RETRACTION OF THE STATEMENT, AS WE HAVE HELD THAT THE RETRACTION OF THE STATEMENT CAN BE PERMITTED IF IT IS SATISFAC TORILY PROVED THAT THE ORIGINAL ADMISSION IS NOT BASED ON THE FACTS AVAILABLE ON RE CORD. THE MISTAKEN IMPRESSION OF FACTS OR LAW CAN BE RETRACTED AND THE RETRACTION IS FOUND PERMISSIBLE IF THE DEPONENT SATISFACTORILY EXPLAINS THAT THE ORIGINAL ADMISSION IS A MISTAKEN BELIEF OF FACTS OR LAW. HERE IN THIS CASE, THE ASSESSEE HAS DISCHARGED THE BURDEN AS WE HAVE ALREADY FOUND THAT THE CREDITWORTHINESS, GENUINENESS OF THE TRANS ACTION AND THE IDENTITY OF THE PARTIES HAVE BEEN SUFFICIENTLY PROVED. THE ASSESSIN G OFFICER NEVER ALLOWED THE ASSESSEE TO CROSS EXAMINE MS. ARUN KHEMKA PARTICULA RLY WHEN ASSESSEE WAS ASKED FOR COPIES OF STATEMENT OF SHRI ARUN KHEMKA AND OPP ORTUNITY TO CROSS EXAMINE. THE ASSESSING OFFICER DECIDED HAT IT IS NOT REQUIRED FO R CROSS EXAMINATION. IT IS VERV FATAL TO THE CASE OF THE DEPARTMENT. NATURAL JUSTICE DEMA NDS THAT OPPORTUNITY OF BEING HEARD TO BE GIVEN PARTICULARLY WHEN THE STATEMENT I S GOING TO BE USED AGAINST THE ASSESSEE IN THE PROCEEDINGS. THIS WAS RIGHTLY APPRE CIATED BY THE LD. CIT DR AND THE DENIAL OF OPPORTUNITY HAS BEEN FOUND UNTENABLE BY T HE LD. CIT(A). THE ONLY EVIDENCE AVAILABLE FOR SUSTAINING THE ADDITION BY THE ASSESS ING OFFICER IS THE STATEMENT OF SHRI ARUN KHEMKA, DIRECTOR OF M/S. GLOBE STOCK & SECURIT IES DATED 20.09.2007 AND THE STATEMENT OF SHRI SUBHAS CHANDRA AGARWALLA WHICH WE RE RECORDED IN THE COURSE OF SURVEY/SEARCH. THE STATEMENTS OF SHRI SUBHAS AGARWA LLA AND SHRI ARUN KHEMKA WERE SUBSEQUENTLY RETRACTED AS STATED IN FOREGOING PARAG RAPHS. HENCE, THERE IS NO MATERIAL TO SUSTAIN THE ADDITION AS THE RETRACTION IS HELD T O BE VALID. IT IS SETTLED LAW THAT THE ADDITION SHOULD BE BASED ON SEARCH MATERIAL AS HELD BY HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. OASIS HOSPITALITIES (P) LIMITED AND OTHERS [2011] 333 ITR 119 (DELHI). 15.1 FURTHER, THE DECISION OF CBDT CIRCULAR NO.F.NO .286/2/2003/IT(INV) DATED 11.03.2003 HAS DIRECTED ITS OFFICES TO FOCUS ON COL LECTION OF EVIDENCE ON UNDISCLOSED INCOME AND NOT ON OBTAINING CONFESSION OF UNDISCLOS ED INCOME. THIS CBDT CIRCULAR HAS NOT BEEN FOLLOWED BY THE ASSESSING OFFICER AND THE ASSESSING OFFICER SIMPLY WENT ON THE CONFESSION STATEMENT MADE BY ONE SHRI ARUN K HEMKA AND WITHOUT BEING 3 OPPORTUNITY TO CROSS EXAMINE SHRI ARUN KHEMKA. THE ASSESSING OFFICER FURTHER RELIED THE DEPOSITION OF THE ASSESSEE-COMPANIES DIRECTOR S HRI SUBHAS CHANDRA AGA.RWALLA WHICH IS TOTALLY ON A WEEK FOUNDATION. HENCE, ALSO THEIR CONFESSION IS NOT AN ADMISSIBLE EVIDENCE UNDER THE GIVEN SET OF FACTS AN D CIRCUMSTANCES AS IT WAS RIGHTLY RETRACTED SUBSEQUENTLY ESTABLISHING THE FACT THAT T HE CONFESSION WAS MADE UNDER DURESS AND CONFESSION AND THE ASSESSEE WAS ASKED TO SIGN ON DOTTED LINES WITHOUT VERIFYING THE CONTENTS OF THE STATEMENT AND AFTER H AVING KNOWLEDGE THAT HE HAD MADE WRONG ADMISSION OF FACTS WITH RELEVANT DETAILS THAT CONFESSION WAS RETRACTED VALIDLY AS THE ADMISSION WAS A WRONG AND CONTRARY TO THE FACT. HENCE, WE ACCEPT THE ORDER OF THE LD. CIT(A) WHO RIGHTLY DELETED THE ADDITION. FURTHE R, THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. J.K. NARAYANAN [2 007] 293 ITR 179 (MAD.), WHILE DECIDING THE BLOCK ASSESSMENT IN THE ORIGINAL BLOCK ASSESSMENT PROCEEDINGS UNDER SECTION 158B HAS HELD THAT THE ADDITION HAS TO BE M ADE ON THE BASIS OF SEARCH MATERIAL AND IN THE ABSENCE OF SEARCH MATERIAL THE ADDITIONS WILL NOT SURVIVE. THIS CASE LAW ALSO RELIED BY THE LD. COUNSEL WHICH SUPPORTS THE C ASE OF THE ASSESSEE. SIMILAR DECISION HAS ALSO BEEN TAKEN IN THE CASE OF CIT VS G.K.SENNIAPPAN [2006] 284 ITR 220 (MAD). HAVING CONSIDERED THE ABOVE MATERIAL AND UNDER THE FACTS AND CIRCUMSTANCES OF HE CASE, WE ARE OF THE VIEW THAT T HE ORDER OF THE LD. CJT(A) IS PERFECTLY JUSTIFIED AND WE HAVE NO HESITATION IN CO NFIRMING THE ORDER OF THE LD. C1T(A) FOR THE DISCUSSED YEAR 2002-03 AS WELL AS FOR THE O THER YEARS UNDER APPEAL 2003-04, 2004-05, 2005-06 & 2006-07. HENCE, THIS ISSUE IS DE CIDED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE FOR ALL THE FIVE YEARS OF AP PEAL BEFORE US. 4.1. SINCE THE FACTS AND CIRCUMSTANCES ARE AKIN TO THAT OF THE ONE CITED ABOVE WE FIND NO INFIRMITY IN THE ORDERS OF THE LD. CIT(A) T O BE INTERFERED WITH. THEREFORE WE CONFIRM THE ACTION OF THE LD. CIT(A) AND DISMISS TH E APPEAL OF REVENUE. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE COURT ON 29.02.2012. SD/- SD/- , , , , MAHAVIR SINGH, JUDICIAL MEMBER . .. . ! ! ! !. .. . , ,, , '# '# '# '# , C.D.RAO, ACCOUNTANT MEMBER. ( (( (!# !# !# !#) )) ) DATE: 29.02.2012. R.G.(.P.S.) 4 '7 2 0% 8'%*9- COPY OF THE ORDER FORWARDED TO: 1. M/S.MAITHAN ISPAT LTD., 9, A.J.C.BOSE ROAD, 6 TH FLOOR, KOLKATA-700017. 2 THE D.C.I.T., CENTRAL CIRCLE-VI, KOLKATA. 3. THE CIT, 4. THE CIT(A)-CENTRAL-I, KOLKATA. 5. DR, KOLKATA BENCHES, KOLKATA 1% 0/ TRUE COPY, '7(4/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES