PIXEL COMMERCIAL PVT. LTD.,KOLKATA V. I.T.O., WARD - 9(3), KOLKATA, KOLKATA

ITA 1601/KOL/2024

AI Insights

The case involves Pixel Commercial Pvt. Ltd., which appealed against the order of the National Faceless Appeal Centre, Delhi, concerning the reassessment of income for the Assessment Year 2009-10. The primary contention was the legality of the reassessment proceedings and the addition of Rs. 8,00,000 as unexplained income under section 69 of the Income Tax Act, 1961. The Tribunal examined the legal grounds challenging the reassessment and the merits of the addition made under section 69. The Tribunal dismissed the legal challenges regarding the reassessment proceedings but allowed the appeal concerning the addition of Rs. 8,00,000, finding the transaction to be genuine.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 23956 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MADHUMITA DAS
• Assessee Lawyers: AMIT AGRAWAL
• Keywords: Opportunity of being heard; Reassessment proceedings; Reopening of assessment; Principle of natural justice; Earning of tax free income; Tangible material
• Section: 147; 148; 143(3); 250; 69

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES “SMC”, KOLKATA BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.1601/KOL/2024 Assessment Year : 2009-10 Pixel Commercial Private Limited, 232, Chittaranjan Avenue, 7th Floor, Flat No. 7B, Kolkata, West Bengal – 700006 PAN : AAECP5260C V/s ITO Ward-9(3), Kolkata Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The captioned appeal pertaining to Assessment Year 2009- 10 at the instance of assessee is directed against the order dated 03.06.2024 passed by National Faceless Appeal Centre, Delhi u/s.250 of the Income-tax Act, 1961 (in short ‘the Act’) which in turn is arising out of Assessment Order dated 20.12.2016 passed u/s. 143(3)/147 of the Act. 2. In the instant appeal, assessee has raised following grounds of appeal : “1. That the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi erred in passing an order dated 3rd of June, 2024 under section 250 of the Income Tax Act, 1961 partly dismissing the appeal of the Appellant without allowing reasonable opportunity of being heard violating the principle of natural justice. Assessee by : Shri Amit Agrawal, Adv. Revenue by : Smt. Madhumita Das, Addl. CIT Date of hearing : 28.11.2024 Date of pronouncement : 31.01.2025 ITA No.1601/Kol/2024 Pixel Commercial Pvt. Ltd. 2. That the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi erred in partly dismissing the appeal of the assessee although the assessment order dated 20th December, 2016 passed by the ITO, Ward 9(3), Kolkata under section u/s 147/143(3) of the Income Tax Act, 1961 was without jurisdiction, illegal and void ab initio. 3. That the Ld. Commissioner of Income Tax (Appeals), erred in partly dismissing the appeal of the Assessee although the initiation of reassessment proceedings, in the case of the Appellant Assessee, by issue of Notice u/s 148 of the Act and continuation of the same culminating into the impugned assessment order passed under section 147 r.w.s 143(3) of the Act, were without jurisdiction, illegal and void ab initio. 4. That the Ld. Commissioner of Income Tax (Appeals) erred in upholding the assessment order u/s 147/143(3) passed by the ITO, Ward 9(3), Kolkata, which is liable to be quashed since the assessment proceeding u/s 147 of the act was initiated by a non jurisdictional assessing officer. 5. That the Ld. Commissioner of Income Tax (Appeals) erred in upholding the reasons recorded before reopening of assessment u/s 148 of the IT Act 1961 which did not meet the test of law laid down by various courts and hence the reopening be declared to be bad in law and the reassessment order be quashed. 6. That the Ld. Commissioner of Income Tax (Appeals) erred in upholding the reopening of assessment u/s 148 of the Act without any tangible material having link to escapement of income and hence the reopening be declared to be bad in law and the reassessment order be quashed. 7. That the National Faceless Appeal Centre, Delhi erred in confirming the addition of Rs. 8,00,000/- made by the Assessing Officer under section 69 of the Income Tax Act, 1961 on the alleged ground that transaction of the assessee appeared to be accommodation entry on irrelevant considerations and arbitrary grounds. 8. That the National Faceless Appeal Centre, Delhi erred in confirming the addition of Rs. 8,00,000/-, as unexplained income under section 69 of the Income Tax Act, 1961 in complete disregard of the binding judgments of Hon'ble Apex Court, Hon'ble Jurisdictional High Court and the Hon'ble Jurisdictional ITAT, which directly lays down a ratio on the merit of the addition of unexplained income under section 69 of the Income Tax Act, 1961. 9. That the appellant craves leave to add, alter or delete all or any of the grounds of appeal. ITA No.1601/Kol/2024 Pixel Commercial Pvt. Ltd. 3. The assessee has raised as many as Nine grounds of which Grounds of appeal No.1 to 6 have been raised challenging the validity of reassessment proceedings. Grounds of Appeal No. 7 and 8 are against addition u/s.69 of the Act at Rs.8.00 lakh made by the AO and affirmed by the CIT(A). 4. Facts in brief are that the assessee is a Private Limited Company and it filed its return of income for the A.Y. 2009-10 on 16.09.2009 declaring income of Rs.1,536/- which was processed on 01.11.2010 at the returned income. Thereafter, based on the information received from the DDIT (Investigation), Unit-4 Kolkata about huge cash deposits in certain bank accounts and thereafter immediate transfer through RTGS to the other interlinked accounts and from one of such account assessee was found to have received Rs.8.00 lakh from Destiny Goods Private limited. Notice u/s.148 of the Act was issued along with serving of reasons recorded to which the assessee responded by filing the return and subsequently followed by issuance of notices u/s.143(2)/142(1) of the Act. Reassessment proceedings were carried out and after considering the assessee’s submissions income was assessed at Rs.11,48,022/- after making addition u/s.69 of the Act at Rs.8.00 lakh towards the alleged amount received from Destiny Goods Private Limited termed as Accommodation entry and secondly disallowance u/s.14A of the Act was made at Rs.3,46,486/-. 5. Aggrieved assessee preferred appeal before the CIT(A) and partly succeeded. ITA No.1601/Kol/2024 Pixel Commercial Pvt. Ltd. 6. Ld.CIT(A) dismissed the legal grounds raised by the assessee, deleted the disallowance u/s.14 of the Act since no exempt income was earned by the assessee and sustained the addition made u/s.69 of the Act. 7. Now the assessee is in appeal before the Tribunal by raising the above-mentioned grounds of appeal. 8. Ld. Counsel for the assessee vehemently argued referring to the details furnished in the paper book containing 37 pages challenging the validity of reassessment proceedings, no proper approval u/s.151 of the act and also contending that addition on merits is uncalled for as it is a simple transaction of sale consideration received from sale of Equity Shares held by the assessee. 9. On the other hand, ld. Departmental Representative relied on the order of the lower authorities. 10. I have heard the rival submissions and perused the record placed before me. So far as the legal grounds raised by the assessee vide Grounds of appeal No.1 to 6, I have carefully gone through the details filed by the assessee as well as the reasons recorded, copy of approval and also finding of ld. CIT(A) and I am of the considered opinion that ld. AO reopened the assessee’s assessment after due application of mind and obtained proper approval and therefore no interference is called for in the finding of ld.CIT(A). I therefore dismiss the legal Grounds of appeal No. 1 to 6 raised by the assessee. 11. Apropos to Grounds of Appeal No.7 and 8 which relates to addition made by the AO u/s.69 of the Act at Rs.8.00 lakh, I have perused the record and notice that the assessee was ITA No.1601/Kol/2024 Pixel Commercial Pvt. Ltd. holding Equity Shares prior to the alleged transaction. The assessee sold some of the Equity Shares held by it to M/s. Destiny Goods Private Limited for a consideration of Rs.8.00 lakh. In support of said transaction, the assessee has furnished the copy of sale bill, ledger copy, bank statements. So far as the proof that the alleged sum of Rs.8.00 lakh was not an accommodation entry, but was sale consideration received from sale of Equity Shares, ld. CIT(A) has also mentioned these facts but nowhere during the course of proceedings before the lower authorities, the genuineness of these documents have been doubted. Rather no enquiry has been conducted by the AO to verify the correctness of these details and in absence of any such enquiry, it has to be presumed that the assessee received sale consideration against the genuine transaction of sale of Equity Shares. Before me, ld. DR failed to controvert these facts. Therefore, I am of the considered view that the ld.CIT(A) has erred in confirming the addition of Rs.8.00 lakh made by the AO u/s.69 of the Act. Finding of ld.CIT(A) is set aside to this extent. Grounds of appeal No.7 and 8 are allowed. 12. In the result, the appeal of the assessee is partly allowed. Order pronounced on this 31st day of January, 2025. - Sd/- (MANISH BORAD) ACCOUNTANT MEMBER पुणे/Pune; \u0001दनांक / Dated : 31st January, 2025 Satish ITA No.1601/Kol/2024 Pixel Commercial Pvt. Ltd. आदेश क\u0002 \u0003ितिलिप अ\tेिषत / Copy of the Order forwarded to : 1. अपीलाथ\f / The Appellant. 2. \r\u000eयथ\f / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय \rितिनिध, आयकर अपीलीय अिधकरण, “(SMC)” ब\u0014च, Kolkata/ DR, ITAT, “(SMC)” Bench, Kolkata. 5. गाड\u0018 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar, ITAT, Kolkata "