ITO, Ward-10(2), Kolkata, Kolkata V. M/s Saffron Comtrade Pvt. Limited, Kolkata

MA 61/KOL/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7791 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 31-07-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 27-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAYANTA KHANRA
• Section: 22; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENC H KOLKATA BEFORE SHRI A. T. VARKEY, JM &DR. A.L.SAINI, AM M.A. NO. 61/KOL/2020 ./ITA NO.2029/KOL/2016 ( / ASSESSMENT YEAR:2012-13) ITO, WARD-10(2), KOLKATA VS. M/S SAFFRON COMTRADE PVT. LTD. P-74, RAM SWAROOP KETTRI ROAD, NEW ALIPORE, KOLKTATA-700069 ./ ./PAN/GIR NO.: AAMCS 5334 A (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI JAYANTA KHANRA, JCIT RESPONDENT BY :NONE / DATE OF HEARING : 03/07/2020 /DATE OF PRONOUNCEMENT : 31/07/2020 / O R D E R PER DR. A. L. SAINI: THIS IS A MISCELLANEOUS APPLICATION FILED BY THE REVENUE PRAYING TO RECALL THE ORDER OF TRIBUNAL IN ITA NO. 2029/KOL/2016 DATE D 28/08/2019. 2. THE CASE OF THE REVENUE IN THIS MISCELLANEOUS AP PLICATION IS AS FOLLOWS: ON THE FACTS AND CIRCUMSTANCES THE CASE, THE LD. I TAT HAS ERRED IN DISMISSING THE REVENUES GROUND OF APPEAL ON THE ISSUE OF BOGUS SH ARE CAPITAL & PREMIUM OF RS. 3,06,52,560/-, ALTHOUGH THIS FACT OF THE CASE IS SQ UARELY COVERED BY THE CASE OF NRA IRON & STEEL PVT. LTD. (SUPREME COURT) IN CIVIL APPEAL NO. 29855 OF 2018 AND SUMAN PODDAR (SUPREME COURT) IN CIVIL APPEAL NO . 26864 OF 2019 MAKING THIS ORDER ERRONEOUS AND PREJUDICIAL TO THIS INTERE ST OF REVENUE. M/S SAFFRON COMTRADE PVT. LTD. MA NO. 61/KOL/2020 (ARISING OUT OF ITA NO.2029/KOL/2016) ASSESSMENT YEAR:2012-13 P PP PA AA AG GG GE EE E | || | 2 22 2 THUS, THE SOLITARY GRIEVANCE OF THE REVENUE IN THIS MISCELLANEOUS APPLICATION IS THAT THE TRIBUNAL HAS ERRED IN DISMISSING REVENUES APPEAL ON THE ISSUE OF BOGUS SHARE CAPITAL/PREMIUM OF RS.3,06,52,560/- ALTHOUGH THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE SQUARELY COVERED IN FAVOUR OF RE VENUE BY THE JUDGMENTS OF THE HONBLE SUPREME COURT IN THE CASE OF NRA IRON & STEEL PVT. LTD, AND SUMAN PODDAR (SUPRA). 3. NONE APPEARED ON BEHALF OF THE ASSESSEE.WE HAVE HEARD LD. DR FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. THE LD. DR FOR THE REVENUE CONTENDED THAT THE ISSUES INVOLVED IN REVENUES APP EAL IN RESPECT OF SHARE CAPITAL IS SQUARELY COVERED BY THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF NRA IRON & STEEL PVT. LTD. (SUPREME COURT) IN CIVIL APPEAL NO. 29855 OF 2018 AND SUMAN PODDAR (SUPREME COURT) IN CIVIL APPEAL NO . 26864 OF 2019 THEREFORE, THE TRIBUNAL OUGHT TO DECIDE ISSUES IN FAVOUR OF RE VENUE. WE HAVE GONE THROUGH THE JUDGMENTS OF THE HONBLE S UPREME COURT IN THE CASE OF NRA IRON & STEEL PVT. LTD. (SUPRA) AND SUMAN PODDAR (SUPRA) AND WE OBSERVED THAT THESE TWO JUDGMENTS OF HONBLE SUPREME COURT R ELATE TO SECTION 68 (CASH CREDITS) OF THE INCOME TAX ACT, 1961. WE NOTE THAT IN ASSESSEES CASE UNDER CONSIDERATION SECTION 68 CASH CREDITS DOES NOT APPLY, AS THERE IS NO CASH CREDIT IN THE B OOKS OF THE ASSESSEE COMPANY. IN THE ASSESSEES CASE SHARES ARE BEING ALLOTTED IN LI EU OF SHARES HELD BY SHARE SUBSCRIBERS I.E. JUST SWAPPING OF SHARES. HENCE, IN THE ASSESSEES CASE NO CASH IS INVOLVED AND THIS IS A SIMPLE CASE OF ACQUIRING SHA RES OF CERTAIN COMPANIES FROM CERTAIN SHAREHOLDERS WITHOUT PAYING CASH CONSIDERATION AND INSTEAD THE CONSIDERATION WAS SETTLED THROUGH ISSUANCE OF SHARE S TO THE RESPECTIVE PARTIES. 4.SINCE THE SHARES ARE EXCHANGED FROM ANOTHER SHARE S (BARTER TRANSACTIONS), THEREFORE, SECTION 68 DOES NOT APPLY TO THE ASSESSE E HENCE THESE TWO JUDGMENTS OF THE HONBLE SUPREME COURT IN THE CASE OF NRA IRON & STEEL PVT. LTD. (SUPRA) AND SUMAN PODDAR (SUPRA), WHICH ARE RELIED BY THE LD DR FOR THE REVENUE, DO NOT APPLY TO THE ASSESSEE COMPANY UNDER CONSIDERATION. M/S SAFFRON COMTRADE PVT. LTD. MA NO. 61/KOL/2020 (ARISING OUT OF ITA NO.2029/KOL/2016) ASSESSMENT YEAR:2012-13 P PP PA AA AG GG GE EE E | || | 3 33 3 5.THIS TRIBUNAL HAS PASSED THE ORDER BY RELYING ON THE JUDGMENT OF THE CO-ORDINATE BENCH IN THE CASE OF M/S ANAND ENTERPRISES LTD. IN ITA NO. 1614/KOL/2016 ORDER DATED 26.09.2018 WHEREIN IT HAS HELD AS FOLLOWS: 4.3. IN VIEW OF THE AFORESAID OBSERVATIONS, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE AFORESAID JUDIC IAL PRECEDENTS RELIED UPON HEREINABOVE, WE HOLD THAT THE LD. AO HAD ERRONEOUSL Y INVOKED THE PROVISIONS OF SECTION 68 OF THE ACT TO THE FACTS OF THE INSTANT C ASE, WHICH, IN OUR CONSIDERED OPINION, ARE NOT AT ALL APPLICABLE HEREIN. THIS IS A SIMPLE CASE OF ACQUIRING SHARES OF CERTAIN COMPANIES FROM CERTAIN SHAREHOLDERS WITHOUT PAYING ANY CASH CONSIDERATION AND INSTEAD THE CONSIDERATION WAS SETTLED THROUGH I SSUANCE OF SHARES TO THE RESPECTIVE PARTIES. MOREOVER, IN THE BALANCE SHEET OF THE ASSESSEE COMPANY IN THE SCHEDULE TO SHARE CAPITAL, IT IS VERY CLEARLY MENTI ONED BY WAY OF NOTE THAT THE FRESH SHARE CAPITAL WAS RAISED DURING THE YEAR FOR CONSID ERATION OTHER THAN CASH. HENCE WE HOLD THAT PROVISION OF SECTION 68 OF THE ACT ARE NOT APPLICABLE IN THE INSTANT CASE AND ACCORDINGLY THE ENTIRE ADDITION DESERVES TO BE DELETED WHICH HAS RIGHTLY BEEN DONE BY THE LD. CIT(A) WHICH DOES NOT REQUIRE ANY I NTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED . 6.THUS, IT IS ABUNDANTLY CLEAR THAT SECTION 68 DOES NOT APPLY TO THE ASSESSEE UNDER CONSIDERATION, AS EXPLAINED ABOVE, THEREFORE THERE IS NO ANY APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL, HENCE, WE DISMISS THE MI SCELLANEOUS APPLICATION FILED BY THE REVENUE. 7. IN THE RESULT, THE MISCELLANEOUS APPLICATION OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 31.07.2020 SD/- ( A.T. VARKEY ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 31/07/2020 ( SB, SR.PS ) M/S SAFFRON COMTRADE PVT. LTD. MA NO. 61/KOL/2020 (ARISING OUT OF ITA NO.2029/KOL/2016) ASSESSMENT YEAR:2012-13 P PP PA AA AG GG GE EE E | || | 4 44 4 COPY OF THE ORDER FORWARDED TO: 1. ITO, WARD-10(2), KOLKATA 2. M/S SAFFRON COMTRADE PVT. LTD. 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES