M/s Srijan Cements Ltd., Kolkata v. D.C.I.T.,Circle-2(2), Kolkata

ITA 1541/KOL/2019 | 2013-2014
Pronouncement Date: 05-05-2021 | Result: Partly Allowed

Appeal Details

RSA Number 154123514 RSA 2019
Assessee PAN AABCP8303P
Bench Kolkata
Appeal Number ITA 1541/KOL/2019
Duration Of Justice 1 year(s) 10 month(s) 10 day(s)
Appellant M/s Srijan Cements Ltd., Kolkata
Respondent D.C.I.T.,Circle-2(2), Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 05-05-2021
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 05-05-2021
Last Hearing Date 05-08-2020
First Hearing Date 22-04-2021
Assessment Year 2013-2014
Appeal Filed On 25-06-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA B BENCH KOLKATA (BEFORE SRI J. SUDHAKAR REDDY HONBLE ACCOUNTANT MEMBER & SRI ABY T. VARKEY HONBLE JUDICIAL MEMBER) ITA NO. 1444/KOL/2019 ASSESSMENT YEAR: 2013-14 DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-2(2) KOLKATA..........................................APPELLANT VS. M/S. SRIJAN CEMENTS LTD......................................................RESPONDENT AMP VAISAAKHI ROOM NO. 702 AG-112 SECTOR-II SALT LAKE KOLKATA -700 091 [PAN : AABCP 8303 P] ITA NO. 1541/KOL/2019 ASSESSMENT YEAR:- 2013-14 M/S. SRIJAN CEMENTS LTD......................................................APPELLANT AMP VAISAAKHI ROOM NO. 702 AG-112 SECTOR-II SALT LAKE KOLKATA -700 091 [PAN : AABCP 8303 P] VS. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-2(2) KOLKATA......RESPONDENT APPEARANCES BY: SHRI SOUMITRO CHOUDHURY ADV. & SHRI JOYDEEP CHAKRABORTY ADV. APPEARED ON BEHALF OF THE ASSESSEE. SMT. RANU BISWAS JCIT D/R APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : APRIL 22 ND 2021 DATE OF PRONOUNCING THE ORDER : MAY 5 TH 2021 ORDER PER J. SUDHAKAR REDDY AM :- THESE ARE CROSS-APPEALS FILED BY THE ASSESSEE AND ARE DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 1 (HEREINAFTER THE LD. CIT(A)) PASSED U/S. 250 OF THE INCOME TAX ACT 1961 (THE ACT) DT. 28/03/2019 FOR THE ASSESSMENT YEAR 2013-14. 2. THERE IS A DELAY OF 1 DAY IN FILING OF THIS APPEAL BY THE ASSESSEE. THE ASSESSEE HAS FILED A CONDONATION PETITION. ON PERUSAL OF THE SAME WE ARE CONVINCED THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM FILING OF THE APPEAL IN TIME. HENCE WE CONDONE THE DELAY AND ADMIT THIS APPEAL OF THE ASSESSEE. FIRST WE TAKE UP THE ASSESSEES APPEAL IN ITA NO. 3. GROUND NOS. 1 2 AND 5 A 4. THE EFFECTIVE GROUNDS OF APPEAL ARE AS FOLLOWS: 3. THE HONORABLE APPELLATE COMMISSIONER HAS NOT ALLOWED A SUM OF RS.25 887/- ON THE GROUND THAT DELAY IN ESIC PAYMENT HAS NOT TAKEN AS A GROUND. THE SAME MAY KINDLY BE ALLOWED. 4. THE HONORABLE APPELLATE COMMISSIONER ERRED IN BOTH IN LAW AND IN FACT BY UPHOLDING THE IMPUGNED ADDITION MADE BY THE LD.A.O. AMOUNTING TO RS.2 06 20 200/- U/S. 68 ON ACCOUNT OF UNSECURED LOAN TAKEN FROM DIRECTORS SHARE HOLD ERS AND RELATED COMPANIES WHICH IS BAD IN LAW AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 5. GROUND NO. 3 IS ON THE ISSUE OF DELAY IN PAYMENT OF ESI. THE LD. CIT(A) DID NOT ALLOW THIS CLAIM OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS NOT TAKEN GROUND. T HE ASSESSEES CASE IS THAT THE AMOUNT IN QUESTION WAS PAID MUCH PRIOR TO THE DUE DATE OF FILING OF THE RETURN OF INCOME AND HAS TO BE ALLOWED. WE FIND MERIT IN THIS CONTENTIONS OF THE ASSESSEE AS THE FACTS ARE NOT DISPUTED BY THE LD. THE PROPOSITIONS OF LAW LAID BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF VIJAY SHREE LIMITED REPORTED IN 224 TAXMAN 12 (CAL.) ALLOWED. 6. GROUND NO. 4 IS AGAINST THE ADDITION OF RS.2 0 LOANS TAKEN BY THE ASSESSEE COMPANY FROM DIRECTORS SHAREHOLDERS AND RELATED COMPANIES. IT IS SEEN THAT ALL THESE LOAN CREDITORS HAVE ADVANCED MONEY TO THE ASSESSEE IN THE EARLIER YEARS AND HAD OPENING BALANCES. A PERUSAL OF DEMONSTRATE THAT SOME OF THE AMOUNTS WERE RETURNED DURING THE YEAR BY THE ASSESSEE COMPANY. THE LOANS IN QUESTION ARE RS.76 49 700/ 2 WAS PREVENTED BY SUFFICIENT CAUSE FROM FILING OF THE APPEAL IN TIME. HENCE WE CONDONE THE DELAY AND ADMIT THIS APPEAL OF THE ASSESSEE. FIRST WE TAKE UP THE ASSESSEES APPEAL IN ITA NO. 1541/KOL/2019 GROUND NOS. 1 2 AND 5 A RE NOT PRESSED AND ARE DISMISSED AS SUCH. THE EFFECTIVE GROUNDS OF APPEAL ARE AS FOLLOWS: - THE HONORABLE APPELLATE COMMISSIONER HAS NOT ALLOWED A SUM OF ON THE GROUND THAT DELAY IN ESIC PAYMENT HAS NOT TAKEN AS A GROUND. SAME MAY KINDLY BE ALLOWED. THE HONORABLE APPELLATE COMMISSIONER ERRED IN BOTH IN LAW AND IN FACT BY UPHOLDING THE IMPUGNED ADDITION MADE BY THE LD.A.O. AMOUNTING TO U/S. 68 ON ACCOUNT OF UNSECURED LOAN TAKEN FROM DIRECTORS SHARE ERS AND RELATED COMPANIES WHICH IS BAD IN LAW AND AGAINST THE PRINCIPLES OF GROUND NO. 3 IS ON THE ISSUE OF DELAY IN PAYMENT OF ESI. THE LD. CIT(A) DID NOT ALLOW THIS CLAIM OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS NOT TAKEN HE ASSESSEES CASE IS THAT THE AMOUNT IN QUESTION WAS PAID MUCH PRIOR TO THE DUE DATE OF FILING OF THE RETURN OF INCOME AND HAS TO BE ALLOWED. WE FIND MERIT IN THIS CONTENTIONS OF THE ASSESSEE AS THE FACTS ARE NOT DISPUTED BY THE LD. D/R. THUS APPLYING THE PROPOSITIONS OF LAW LAID BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF VIJAY SHREE LIMITED REPORTED IN 224 TAXMAN 12 (CAL.) THIS GROUND OF THE ASSESSEE IS GROUND NO. 4 IS AGAINST THE ADDITION OF RS.2 0 6 20 200/- THESE ARE UNSECURED LOANS TAKEN BY THE ASSESSEE COMPANY FROM DIRECTORS SHAREHOLDERS AND RELATED COMPANIES. IT IS SEEN THAT ALL THESE LOAN CREDITORS HAVE ADVANCED MONEY TO THE ASSESSEE IN THE EARLIER YEARS AND HAD OPENING BALANCES. A PERUSAL OF THE LEDGER ACCOUNTS ALSO DEMONSTRATE THAT SOME OF THE AMOUNTS WERE RETURNED DURING THE YEAR BY THE ASSESSEE COMPANY. THE LOANS IN QUESTION ARE RS.76 49 700/ - FROM MR. ASHOKE AGARWAL ITA NO. 1444/KOL/2019 ASSESSMENT YEAR: 2013-14 ITA NO. 1541/KOL/2019 ASSESSMENT YEAR:- 2013-14 M/S. SRIJAN CEMENTS LTD. WAS PREVENTED BY SUFFICIENT CAUSE FROM FILING OF THE APPEAL IN TIME. HENCE WE CONDONE RE NOT PRESSED AND ARE DISMISSED AS SUCH. THE HONORABLE APPELLATE COMMISSIONER HAS NOT ALLOWED A SUM OF ON THE GROUND THAT DELAY IN ESIC PAYMENT HAS NOT TAKEN AS A GROUND. THE HONORABLE APPELLATE COMMISSIONER ERRED IN BOTH IN LAW AND IN FACT BY UPHOLDING THE IMPUGNED ADDITION MADE BY THE LD.A.O. AMOUNTING TO U/S. 68 ON ACCOUNT OF UNSECURED LOAN TAKEN FROM DIRECTORS SHARE ERS AND RELATED COMPANIES WHICH IS BAD IN LAW AND AGAINST THE PRINCIPLES OF GROUND NO. 3 IS ON THE ISSUE OF DELAY IN PAYMENT OF ESI. THE LD. CIT(A) DID NOT ALLOW THIS CLAIM OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS NOT TAKEN A SPECIFIC HE ASSESSEES CASE IS THAT THE AMOUNT IN QUESTION WAS PAID MUCH PRIOR TO THE DUE DATE OF FILING OF THE RETURN OF INCOME AND HAS TO BE ALLOWED. WE FIND MERIT IN THIS D/R. THUS APPLYING THE PROPOSITIONS OF LAW LAID BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. THIS GROUND OF THE ASSESSEE IS THESE ARE UNSECURED LOANS TAKEN BY THE ASSESSEE COMPANY FROM DIRECTORS SHAREHOLDERS AND RELATED COMPANIES. IT IS SEEN THAT ALL THESE LOAN CREDITORS HAVE ADVANCED MONEY TO THE ASSESSEE THE LEDGER ACCOUNTS ALSO DEMONSTRATE THAT SOME OF THE AMOUNTS WERE RETURNED DURING THE YEAR BY THE ASSESSEE MR. ASHOKE AGARWAL RS.89 44 000/- FROM MR. ADITYA AGARWAL RS.19 49 500/ LTD. AND RS.20 77 000/- FROM M/S. NEW HIGH SILK HOUSE (P) LTD. THE ASSESSEE HAS FURNISHED THE NAMES AND ADDRESSES OF ALL THESE LOAN CREDITORS THEIR PAN NOS. CONFIRMATION LETTERS DETAILS OF THE TRANSACTIONS AND EVIDENCE TO PROVE THE IDENTITY A CREDITWORTHINESS OF THESE PARTIES. THE ASSESSING OFFICER HAD ISSUED NOTICES U/S 133(6) OF THE ACT TO ALL THESE LOAN CREDITORS AND REPLIES WERE RECEIVED BY THE ASSESSING OFFICER. IN THESE REPLIES THE LOAN CREDITORS HAVE FILED THE CONFIRMATIONS COPY OF COPY OF RETURNS OF INCOME FILED BY THEM TO PROVE THAT THEY ARE REGULAR TAX PAYERS. ADVERSE MATERIAL IS BROUGHT ON RECORD BY THE ASSESSING OFFICER OR THE LD. CIT(A). 6.1. WE FIND THAT THE LD. CIT(A) HAS DRAWN A WRONG PRESUMPTION THAT TH ENTRIES ARE SHARE CAPITAL RECEIVED BY THE ASSESSEE COMPANY. THIS IS FACTUALLY INCORRECT. THESE ARE LOANS RECEIVED BY THE ASSESSEE COMPANY WHICH WAS REPAID. WERE ADDED AS SHARE CAPITAL SUBSCRIBED. 2 06 20 200/- MADE U/S 68 OF THE ACT AS THE ASSESSEE HAS PROVED THE IDENTITY AND CREDITWORTHINESS OF ALL THESE LOAN CREDITORS AS WELL AS THE GENUINENESS OF THE TRANSACTIONS. 7. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED IN PART. NOW WE TAKE UP THE REVENUE 8. GROUND NO. 1 RAISED BY THE REVENUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF LIMITED REPORTED IN 224 TAXMAN NO. 3 OF THE ASSESSEES APPEAL 9. GROUND NO. 2 IS AGAINST THE DELETION OF AN ADDITION OF UNEXPLAINED CASH DEPOSIT OF RS.89 02 328/- BY THE LD. CIT(A). AF ASSESSEE HAD RECORDED CASH SALES IN ITS RECEIVED ON SALE WA S DEPOSITED IN THE BANK ACCOUNT. WHEN ALL THESE TRANSACTIONS ARE RECORDED IN THE REGULAR BOOKS OF ACCOUNT CASH DEPOSITS AS INCOME FROM SALES THE QUESTION OF MAKING AN ADDITION ONCE AGAIN DOES 3 FROM MR. ADITYA AGARWAL RS.19 49 500/ - FROM M/S. ELEGANT FROM M/S. NEW HIGH SILK HOUSE (P) LTD. THE ASSESSEE HAS FURNISHED THE NAMES AND ADDRESSES OF ALL THESE LOAN CREDITORS THEIR PAN NOS. CONFIRMATION LETTERS DETAILS OF THE TRANSACTIONS AND EVIDENCE TO PROVE THE IDENTITY A CREDITWORTHINESS OF THESE PARTIES. THE ASSESSING OFFICER HAD ISSUED NOTICES U/S 133(6) OF THE ACT TO ALL THESE LOAN CREDITORS AND REPLIES WERE RECEIVED BY THE ASSESSING OFFICER. IN THESE REPLIES THE LOAN CREDITORS HAVE FILED THE CONFIRMATIONS COPY OF RETURNS OF INCOME FILED BY THEM TO PROVE THAT THEY ARE REGULAR TAX PAYERS. ADVERSE MATERIAL IS BROUGHT ON RECORD BY THE ASSESSING OFFICER OR THE LD. CIT(A). WE FIND THAT THE LD. CIT(A) HAS DRAWN A WRONG PRESUMPTION THAT TH ENTRIES ARE SHARE CAPITAL RECEIVED BY THE ASSESSEE COMPANY. THIS IS FACTUALLY INCORRECT. THESE ARE LOANS RECEIVED BY THE ASSESSEE COMPANY WHICH WAS REPAID. WERE ADDED AS SHARE CAPITAL SUBSCRIBED. ON THESE FACTS WE DELETE THE A MADE U/S 68 OF THE ACT AS THE ASSESSEE HAS PROVED THE IDENTITY AND CREDITWORTHINESS OF ALL THESE LOAN CREDITORS AS WELL AS THE GENUINENESS OF THE IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED IN PART. REVENUE S APPEAL IN ITA NO. 1444 /KOL/2019 GROUND NO. 1 RAISED BY THE REVENUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. VIJAY SHREE LIMITED REPORTED IN 224 TAXMAN 12 (CAL.) AS DISCUSSED BY US WHILE DISPOSING OFF GROUND NO. 3 OF THE ASSESSEES APPEAL . HENCE WE DISMISS THIS GROUND OF THE REVENUE. GROUND NO. 2 IS AGAINST THE DELETION OF AN ADDITION OF UNEXPLAINED CASH DEPOSIT OF BY THE LD. CIT(A). AF TER HEARING RIVAL CONTENTIONS WE FIND THAT THE ASSESSEE HAD RECORDED CASH SALES IN ITS REGULAR CASH BOOK AND THAT S DEPOSITED IN THE BANK ACCOUNT. WHEN ALL THESE TRANSACTIONS ARE RECORDED IN THE REGULAR BOOKS OF ACCOUNT S AND WHEN THE ASSESSEE HAS DECLARED THESE CASH DEPOSITS AS INCOME FROM SALES THE QUESTION OF MAKING AN ADDITION ONCE AGAIN DOES ITA NO. 1444/KOL/2019 ASSESSMENT YEAR: 2013-14 ITA NO. 1541/KOL/2019 ASSESSMENT YEAR:- 2013-14 M/S. SRIJAN CEMENTS LTD. FROM M/S. ELEGANT TIE-UP (P) FROM M/S. NEW HIGH SILK HOUSE (P) LTD. THE ASSESSEE HAS FURNISHED THE NAMES AND ADDRESSES OF ALL THESE LOAN CREDITORS THEIR PAN NOS. CONFIRMATION LETTERS DETAILS OF THE TRANSACTIONS AND EVIDENCE TO PROVE THE IDENTITY A ND CREDITWORTHINESS OF THESE PARTIES. THE ASSESSING OFFICER HAD ISSUED NOTICES U/S 133(6) OF THE ACT TO ALL THESE LOAN CREDITORS AND REPLIES WERE RECEIVED BY THE ASSESSING OFFICER. IN THESE REPLIES THE LOAN CREDITORS HAVE FILED THE CONFIRMATIONS COPY OF BANK STATEMENTS RETURNS OF INCOME FILED BY THEM TO PROVE THAT THEY ARE REGULAR TAX PAYERS. NO ADVERSE MATERIAL IS BROUGHT ON RECORD BY THE ASSESSING OFFICER OR THE LD. CIT(A). WE FIND THAT THE LD. CIT(A) HAS DRAWN A WRONG PRESUMPTION THAT TH ESE CREDIT ENTRIES ARE SHARE CAPITAL RECEIVED BY THE ASSESSEE COMPANY. THIS IS FACTUALLY INCORRECT. LOAN TRANSACTIONS ON THESE FACTS WE DELETE THE A DDITION OF RS. MADE U/S 68 OF THE ACT AS THE ASSESSEE HAS PROVED THE IDENTITY AND CREDITWORTHINESS OF ALL THESE LOAN CREDITORS AS WELL AS THE GENUINENESS OF THE /KOL/2019 GROUND NO. 1 RAISED BY THE REVENUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE CIT VS. VIJAY SHREE WHILE DISPOSING OFF GROUND . HENCE WE DISMISS THIS GROUND OF THE REVENUE. GROUND NO. 2 IS AGAINST THE DELETION OF AN ADDITION OF UNEXPLAINED CASH DEPOSIT OF TER HEARING RIVAL CONTENTIONS WE FIND THAT THE AND THAT THIS CASH AMOUNT S DEPOSITED IN THE BANK ACCOUNT. WHEN ALL THESE TRANSACTIONS ARE S AND WHEN THE ASSESSEE HAS DECLARED THESE CASH DEPOSITS AS INCOME FROM SALES THE QUESTION OF MAKING AN ADDITION ONCE AGAIN DOES NOT ARISE. THIS WILL RESULT IN DOUBLE ADDITION. THE LD. CIT(A) IN OUR VIEW HAS RIGHTLY DELETED THIS ADDITION. WE UPHOLD THE 10. GROUND NO. 3 IS GENERAL IN NATURE. 11. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED IN PART AND THE APPEAL OF THE REVENUE IS DISMISSED. KOLKATA THE SD/- [ ABY T. VARKEY ] JUDICIAL MEMBER DATED: 05.05.2021 {SC SPS} COPY OF THE ORDER FORWARDED TO: 1. M/S. SRIJAN CEMENTS LTD AMP VAISAAKHI ROOM NO. 702 AG-112 SECTOR-II SALT LAKE KOLKATA -700 091 2. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 3. CIT(A)- 4. CIT- 5. CIT(DR) KOLKATA BENCHES KOLKATA. 4 NOT ARISE. THIS WILL RESULT IN DOUBLE ADDITION. THE LD. CIT(A) IN OUR VIEW HAS RIGHTLY DELETED THIS ADDITION. WE UPHOLD THE SAME AND DISMISS THIS GROUND OF THE REVENUE. GROUND NO. 3 IS GENERAL IN NATURE. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED IN PART AND THE APPEAL OF THE KOLKATA THE 5 TH DAY OF MAY 2021. [ J. SUDHAKAR REDDY ACCOUNTANT MEMBER DEPUTY COMMISSIONER OF INCOME TAX CIRCLE -2(2) KOLKATA 5. CIT(DR) KOLKATA BENCHES KOLKATA. ASSISTANT REGISTRAR ITAT KOLKATA BENCHES ITA NO. 1444/KOL/2019 ASSESSMENT YEAR: 2013-14 ITA NO. 1541/KOL/2019 ASSESSMENT YEAR:- 2013-14 M/S. SRIJAN CEMENTS LTD. NOT ARISE. THIS WILL RESULT IN DOUBLE ADDITION. THE LD. CIT(A) IN OUR VIEW HAS RIGHTLY SAME AND DISMISS THIS GROUND OF THE REVENUE. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED IN PART AND THE APPEAL OF THE SD/- J. SUDHAKAR REDDY ] ACCOUNTANT MEMBER TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT KOLKATA BENCHES