Paradise Sheets Private Limited , Mumbai V. ITO, Ward - 1(1), Kolkata , Kolkata

MA 174/KOL/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3981 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 19-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S M SURANA
• Keywords: Earning of tax free income
• Section: 14A; 133(6); 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC KOLKATA BEFORE SHRI S.S, GODARA, JUDICIAL MEMBER (MISC. APPLICATION) M.A.NO.174/KOL/2019 (ARISING OUT ITA NO.861/KOL/2018) / ASSESSMENT YEAR:2012-13 ITA NO.861/KOL/2018 / ASSESSMENT YEAR:2012-13 PARADISE SHEETS PVT. LTD., 109, KANDORI NAGAR, CO-OP HSG SOCIETY, LTD., 199-215 PANJRAPOLE LANE, MUMBAI- 400 004 [ PAN NO.AACCV 0897 M ] / V/S . INCOME TAX OFFICER WARD-1(1), AAYAKAR BHAWAN,P-7,CHOWRINGHEE, 7 TH FLOOR, KOLKATA-700 069 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI S.M. SURANA, ADVOCATE /BY RESPONDENT SHRI SUPRIYO PAL, JCIT-SR-DR ' /DATE OF HEARING 18-10-2019 ' /DATE OF PRONOUNCEMENT 08-11-2019 /O R D E R THIS ASSESSEES MISCELLANEOUS APPLICATION FILED U/ S. 254(2) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. SEEKS TO RE-CALL / R ECTIFY THE TRIBUNALS ORDER DATED 19.09.2018 ON ACCOUNT OF NON PROSECUTION SINCE NOB ODY HAD APPEARED IN THE MAIN CASE HEARING FIXED FOR THE VERY DATE. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. LEARNED COUNSELS ONLY PLEA DURING THE COURSE OF HEARING IS THAT THE ASSESSEE HAD NOT RECEIVED NOTICE OF HEARING IN THE MAIN CASE FIXED FOR HEARING ON 19.09.2018. ALL THESE AVERMENTS HAVE GONE UNREBUTTED FROM THE R EVENUE SIDES. I THEREFORE RE-CALL MA NO.174/KOL/2019 & ITA NO.861/KOL/2018 A.Y.2012 -13 M/S PARADISE SHEETS PVT. LTD. VS. ITO WD-1(1), KOL. PAGE 2 MY ORDER DATED 19.09.2018 IN THE INTEREST OF SUBSTA NTIAL JUSTICE. THIS ASSESSEE MISCELLANEOUS APPLICATION MA NO.174/KOL/2019 IS ALL OWED. 3. WITH THE CONSENT OF BOTH THE PARTIES, I NOW PROC EED TO TAKE UP ASSESSEES APPEAL ITA NO.861/KOL/2018 ITSELF FOR ADJUDICATION. THE A SSESSEES FORMER SUBSTANTIVE GRIEVANCE CHALLENGES CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION TREATING THE CURRENCY DERIVATIVES LOSSES OF 12,40,780/- TO BE NON-GENUINE BASIS ON SUCH STATEME NT MADE BY ONE SHRI SUCHET SARAF AS THE DIRECTOR OF M/ S MARIGOLD VANIJYA PVT. LTD. WHO HAD ACTED AS A COMMODITY BROKER. IT TRANSPIRES THAT THIS TRIBUNALS CO-ORDINATE BENCHS ORDER IN ITA NO.1560/KOL/2016 DECIDED ON 28.03.2018 IN ACIT CIRCLE-12(2) VS. M/S TIRUPATI AWAS PVT. LTD . HAS REVERSED THE LOWER AUTHORITIES SIMILAR ACTION BASED ON SHRI SUCHET SARAFS VERY STATEMENT AS UNDER:- 10. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA L ON RECORD. WE FIND THAT THE AO ISSUED NOTICE U/S, 133(6) OF THE ACT TO MCX STOCK E XCHANGE, MUMBAI. ADMITTEDLY THE SAID STOCK EXCHANGE COMPLIED WITH THE NOTICE ISSUED BY THE AO ALONG WITH SUPPLYING VARIOUS DETAILS IN RESPECT OF SAID TRANSACTION. ACC ORDING TO AO, IT IS INCOMPLETE DETAILS. HOWEVER, THE CIT -A NOTED IN HIS ORDER THA T THE AO FAILED TO VERIFY THE GENUINENESS OF TRANSACTION WITH THAT OF BROKER OF M CX STOCK EXCHANGE. IT IS ALSO OBSERVED THAT THE CIT -A FOUND SATISFIED THAT THE A SSESSEE FILED ALL THE REQUIRED DETAILS AND DOCUMENTS IN SUPPORT OF THE TRANSACTIONS ENTERE D INTO BY IT IN RESPECT OF FOREIGN EXCHANGE DERIVATIVES. WE FIND THAT THE AO MADE THE ADDITION ONLY ON THE BASIS OF STATEMENT RECORDED DURING THE SEARCH & SEIZURE OPER ATION IN THE PREMISES OF THE SAID SHRI SACHET SARAF, DIRECTOR OF M/S. MARIGOLD VANIJY A P.LTD. THE SAID STATEMENT OF MR. SARAF WAS RETRACTED AT A LATER POINT OF TIME. THE C IT -A FOUND SATISFIED THAT THERE WAS NO CORROBORATIVE EVIDENCE WHICH SUPPORTS THE VIEW O F THE AO THAT THE SAID TRANSACTION WAS UNEXPLAINED. THEREFORE, WE FIND NO ADDITIONAL E VIDENCE, WHICH WAS FILED BEFORE THE CIT -A, BUT NOT BEFORE THE AO. THE CIT -A DELET ED THE SAID ADDITION ONLY ON THE BASIS OF MATERIAL/EVIDENCE AVAILABLE ON RECORD, WHI CH WERE VERY MUCH BEFORE THE AO IN THE RE-ASSESSMENT PROCEEDINGS. THE CASE LAWS AS RELIED ON BY THE ASSESSEE BEFORE THE CIT -A WERE RELEVANT AND APPLICABLE TO THE PRES ENT FACTS OF THE CASE. THE CIT-A HAS DISCUSSED THE EACH CASE LAW THOROUGHLY. THUS, T HE CIT-A WAS JUSTIFIED IN DELETING THE ADDITION MADE BY THE AO ON THIS ISSUE. THE GROU NDS RAISED BY THE REVENUE IN THE APPEAL ARE DISMISSED . I ADOPT THE ABOVE DETAILED REASONING MUTATIS MUTANDIS TO REVERSE BOTH THE LOWER AUTHORITIES ACTION. THIS ASSESSEE SUCCEEDS IN ITS S UBSTANTIAL GROUND. 4. COMING TO LATTER ISSUE U/S 14A OF 4.55 LAKH. I FIND THAT THE ASSESSEE HAS NOT DERIVED ANY EXEMPT INCOME IN THE RELEVANT PREVIOUS YEAR. HON'BLE JURISDICTIONAL HIGH MA NO.174/KOL/2019 & ITA NO.861/KOL/2018 A.Y.2012 -13 M/S PARADISE SHEETS PVT. LTD. VS. ITO WD-1(1), KOL. PAGE 3 COURTS DECISION IN CIT VS. ASHIKA GLOBAL SECURITIES LTD ITAT 100/2009 GA NO.2122 OF 2014 DATED 11.06.2018 HOLDS THAT THE IMPUGNED DI SALLOWANCE DOES NOT APPLY IN ABSENCE OF ANY EXEMPT INCOME DERIVED AT THE ASSESSE ES BEHEST. THIS ASSESSEES LATTER SUBSTANTIVE GROUND IS ALSO ACCEPTED. THIS MAIN APPE AL ITA NO.861/KOL/2018 IS ALLOWED. 6. THE ASSESSEES MISCELLANEOUS APPLICATION MA NO.1 74/KOL/2019 IS ALLOWED AS WELL AS THE MAIN APPEAL ITA NO.861/KOL/2018 ARE ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON 08/11/2018 SD/- (S.S. GODARA) JUDICIAL MEMBER KOLKATA, *DKP/SR.PS & - 08/11/2018 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-PARADISE SHETS PVT.LTD., 109, KANDORI NA GAR,CO-OP HSG SOC. LTD 199-215 PANJRAPO LE LANE, MUMBAI-400 004 2. /RESPONDENT-ITO WARD-1(1), AAYAKAR BHAWAN, P-7, CHO WRINGHEE SQ. 7 TH FL, KOLKATA-69 3. ) * / CONCERNED CIT 4. * - / CIT (A) 5. ) , ' ) / DR, ITAT, KOLKATA 6. / GUARD FILE. BY ORDER/ , /TRUE COPY/ ' ),