ITO, Ward-12(3), Kolkata, Kolkata v. M/S. Indo Wagon Engineering Ltd., Kolkata

ITA 1890/KOL/2014 | 2010-2011
Pronouncement Date: 28-09-2016

Appeal Details

RSA Number 189023514 RSA 2014
Assessee PAN AABCI1097B
Bench Kolkata
Appeal Number ITA 1890/KOL/2014
Duration Of Justice 1 year(s) 11 month(s) 19 day(s)
Appellant ITO, Ward-12(3), Kolkata, Kolkata
Respondent M/S. Indo Wagon Engineering Ltd., Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 28-09-2016
Appeal Filed By Department
Bench Allotted SMC
Tribunal Order Date 28-09-2016
Date Of Final Hearing 21-07-2016
Next Hearing Date 21-07-2016
Assessment Year 2010-2011
Appeal Filed On 09-10-2014
Judgment Text
I.T.A. NO. 1890/KOL./2014 ASSESSMENT YEAR: 2010-2011 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA C(SMC) BENCH KOLKATA BEFORE SHRI P.M. JAGTAP ACCOUNTANT MEMBER I.T.A. NO. 1890 /KOL/ 2014 ASSESSMENT YEAR: 2010-2011 INCOME TAX OFFICER ................................ ...............................APPELLANT WARD-12(3) KOLKATA AAYAKAR BHAWAN P-7 CHOWRINGHEE SQUARE KOLKATA-700 069 -VS.- M/S. INDO WAGON ENGINEERING LTD. .................. .................RESPONDENT 228A A.J.C. BOSE ROAD 5 TH FLOOR KOLKATA-700 020 [PAN: AABCI 1097 B] APPEARANCES BY: SHRI RAJAT KUMAR KUREEL JCIT D.R. FOR THE DEPARTMENT SHRI MANOJ KATARUKA ADVOCATE FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : JULY 21 2016 DATE OF PRONOUNCING THE ORDER : SEPTEMBER 28 2016 O R D E R THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XII KOLKATA D ATED 21.07.2014 AND IN THE SOLITARY GROUND RAISED THEREIN THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT(APPEALS) IN DELETING THE ADDI TION OF RS.48 45 015/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF THE ALL EGED BOGUS LIABILITY. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INVESTMEN T COMPANY. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION W AS FILED BY IT ON 21.09.2010 DECLARING TOTAL INCOME OF RS.16 061/-. I N THE BALANCE-SHEET FILED ALONG WITH THE SAID RETURN A SUM OF RS.48 45 015/- WAS SHOWN BY THE ASSESSEE AS PAYABLE TO M/S. VISAGE EQUIPMENTS P VT. LIMITED AS SUNDRY CREDITOR. IN ORDER TO VERIFY THE GENUINENESS OF THE SAID LIABILITY A NOTICE UNDER SECTION 133(6) WAS ISSUED BY THE ASSESSING OF FICER ON 29.11.2012 WHICH COULD NOT BE SERVED BY THE POSTAL AUTHORITY O N M/S. VISAGE I.T.A. NO. 1890/KOL./2014 ASSESSMENT YEAR: 2010-2011 PAGE 2 OF 4 EQUIPMENTS PVT. LIMITED. WHEN THIS POSITION WAS CON FRONTED BY THE ASSESSING OFFICER TO SHRI A.K. GOENKA DIRECTOR OF THE ASSESSEE-COMPANY HE REQUESTED THE ASSESSING OFFICER TO SEND THE NOTI CE AGAIN. ACCORDINGLY A NOTICE UNDER SECTION 133(6) WAS ISSUED BY THE ASS ESSING OFFICER ON 14.12.2012 IN RESPONSE TO WHICH A REPLY WAS FILED BY M/S. VISAGE EQUIPMENTS PVT. LIMITED CONFIRMING THE BALANCE SHOW N BY THE ASSESSEE. IT WAS HOWEVER FOUND BY THE ASSESSING OFFICER FROM T HE ASSESSMENT RECORDS OF ANOTHER ASSESSEE NAMELY M/S. RAGHAV IND USTRIES LIMITED THAT A SIMILAR LIABILITY SHOWN IN THE NAME OF M/S. VISAG E EQUIPMENTS PVT. LIMITED WAS TREATED BY THE ASSESSING OFFICER AS A B OGUS LIABILITY AFTER VERIFICATION. FOLLOWING THE STAND TAKEN IN THE CASE OF RAGHAV INDUSTRIES LIMITED THE LIABILITY SHOWN BY THE ASSESSEE IN THE NAME OF M/S. VISAGE EQUIPMENTS PVT. LIMITED WAS TREATED BY THE ASSESSIN G OFFICER AS BOGUS AND THE SAME AMOUNTING TO RS.48 45 015/- WAS ADDED BY HIM TO THE TOTAL INCOME OF THE ASSESSEE IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 31.01.2013. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3) AN APPEAL WAS PREFERRED BY THE ASSESSEE BEF ORE THE LD. CIT(APPEALS) AND AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECORD THE LD . CIT(APPEALS) DELETED THE ADDITION OF RS.48 45 015/- MADE BY THE ASSESSIN G OFFICER BY TREATING THE LIABILITY SHOWN BY THE ASSESSEE IN THE NAME OF M/S. VISAGE EQUIPMENTS PVT. LIMITED AS BOGUS FOR THE FOLLOWING REASONS GIV EN IN HIS IMPUGNED ORDER:- IT IS NOTED THAT THE ENTIRE BASIS OF ASSESSMENT OF THE ASSESSING OFFICER IS ON THE RELIANCE OF THE INVESTIGATION REP ORT AS WELL ASS THE ASSESSMENT ORDER FRAMED IN THE CASE OF RAGHAV I NDUSTRIES LIMITED. IT IS NOT KNOWN AS TO WHAT IS THE STATUS O F THE CASE OF RAGHAV INDUSTRIES LIMITED AS THE APPELLANT IS NOT H AVING ANY RELATIONSHIP WITH THE COMPANY VIZ. RAGHAV INDUSTRIE S LIMITED AND IF AT ALL WHATEVER IS THE OUTCOME OF THE ASSESS MENT FRAMED IS NOT KNOWN AND NOT RELEVANT IN DECIDING THIS ISSU E IN HAND. THE ASSESSING OFFICER HAS NOT CONDUCTED ANY INDEPEN DENT INQUIRY TO FIND OUT WHETHER THE SHARES PURCHASED FR OM VISAGE EQUIPMENTS PVT. LTD. WERE GENUINE OR NOT. THE PRIMA FACIE DETAILS AND FINDINGS SUBMITTED BY THE APPELLANT DOE S NOT IN ANY I.T.A. NO. 1890/KOL./2014 ASSESSMENT YEAR: 2010-2011 PAGE 3 OF 4 MANNER POINT THAT THERE WAS ANY NON- GENUINITY IN R ESPECT OF THE SHARES PURCHASED. THE APPELLANT HAD PURCHASED F ROM VISAGE EQUIPMENTS PVT. LTD. SHARES WHICH HAS BEEN EVEN MEN TIONED IN THE ASSESSMENT ORDER FOR AN AMOUNT OF RS.4 04 54 01 5/- AND DURING THE IMPUGNED ASSESSMENT YEAR THE APPELLANT P AID AN AMOUNT OF RS.3 56 09 000/- TO VISAGE EQUIPMENTS PVT . LTD. AND THE BALANCE OF RS.48 45 015/- WAS STANDING AS SUNDR Y CREDITORS. THEREFORE WHEN THE INVESTMENT MADE BY THE APPELLAN T ARE ACCEPTED BY THE ASSESSING OFFICER FROM THE SAME PAR TY AND WHEN PAYMENTS MADE DURING THE YEAR TO THE SAME PART Y HAVE BEEN ACCEPTED BY THE ASSESSING OFFICER THEN IT IS NOT UNDERSTOOD AS TO HOW THE SUNDRY CREDITORS AMOUNT IS BOGUS? THE WHOLE BASIS OF THE ASSESSMENT AND ADDITION IN MY OPINION IS ON A WRONG FOOTING AND BASIS OF ANOTHER ASSESSMENT ORDER WHICH DOES NOT FULFIL THE CRITERIA OR THE TES TS FOR MAKING ADDITIONS IN THE CASE OF THE APPELLANT. I AM OF THE CONSIDERED VIEW THAT ON THE BASIS OF THE FACTS OF THE CASE TH E ISSUE IN HAND SHOULD HAVE BEEN INTROSPECTED TO COME TO A FINDING WHETHER THE SUNDRY CREDITORS ARE GENUINE OR NOT. HOWEVER IT IS OBSERVED THAT THE ASSESSING OFFICER HAS NOT COME TO ANY INDE PENDENT FINDING DURING THE RELEVANT YEAR THAT THE SUNDRY CR EDITORS ARE NOT GENUINE EXPECT RELYING ON OR REFERRING THE ASSE SSMENT FRAMED IN THE CASE OF RAGHAV INDUSTRIES LIMITED FOR THE ASST. YEAR 2009-10. IN THE LIGHT OF THE ABOVE DISCUSSION & FINDING PER USING THE ENTIRE FACTS OF THE CASE I AM OF THE CONSIDERE D VIEW THAT THE ADDITION MADE BY THE ASSESSING OFFICER BASED ON ENT IRELY WRONG FOOTING AND CANNOT STAND THE TEST OF LAW. HENCE TH E ADDITION MADE BY THE AO IS HEREBY DIRECTED TO BE DELETED. TH US THESE GROUNDS OF APPEAL OF THE APPELLANT ARE ALLOWED AS I NDICATED ABOVE. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS) THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT THE IMPUGNED ADDITION OF RS.48 45 015/- WAS MADE BY THE ASSESSIN G OFFICER TO THE TOTAL INCOME OF THE ASSESSEE BY TREATING THE LIABILITY IN THE NAME OF M/S. VISAGE EQUIPMENTS PVT. LIMITED AS BOGUS BY MAINLY RELYING ON THE ASSESSMENT ORDER PASSED IN THE CASE OF ANOTHER ASSESSEE NAMELY M/S. RAGHAV INDUSTRIES LIMITED WHEREIN THE LIABILITY APPEARING IN THE NAME OF THE SAID PARTY WAS TREATED BY THE ASSESSING OFFICER AS BOGUS . AS POINTED OUT BY THE I.T.A. NO. 1890/KOL./2014 ASSESSMENT YEAR: 2010-2011 PAGE 4 OF 4 LD. COUNSEL FOR THE ASSESSEE FROM THE COPIES OF REL EVANT ORDERS THE ORDER OF THE ASSESSING OFFICER PASSED IN THE CASE OF M/S. RAGHAV INDUSTRIES LIMITED ON THIS ISSUE HAS ALREADY BEEN REVERSED BY THE LD CIT(APPEALS) VIDE HIS ORDER DATED 30.09.2014 AND THE APPEAL FILE D BY THE REVENUE AGAINST THE SAID ORDER HAS BEEN DISMISSED BY THE TR IBUNAL VIDE ITS ORDER DATED 20.01.2016 PASSED IN ITA NO.2268/KOL/2014 ON ACCOUNT OF LOW TAX EFFECT INVOLVED THEREIN. KEEPING IN VIEW THIS POSIT ION AS WELL AS THE REASONS GIVEN BY THE LD. CIT(APPEALS) IN HIS IMPUGN ED ORDER I FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT(APPE ALS) DELETING THE ADDITION OF RS.48 45 015/- MADE BY THE ASSESSING OF FICER TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF THE ALLEGED BO GUS LIABILITY. THE SAME IS THEREFORE UPHELD AND THIS APPEAL OF THE R EVENUE IS DISMISSED. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON SEPTEMBER 28 2016. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA THE 28 TH DAY OF SEPTEMBER 2016 COPIES TO : (1) INCOME TAX OFFICER WARD-12(3) KOLKATA AAYAKAR BHAWAN P-7 CHOWRINGHEE SQUARE KOLKATA-700 069 (2) M/S. INDO WAGON ENGINEERING LTD. 228A A.J.C. BOSE ROAD 5 TH FLOOR KOLKATA-700 020 (3) COMMISSIONER OF INCOME TAX (APPEALS)-XII KOL KATA; (4) COMMISSIONER OF INCOME TAX- (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES KOLKATA LAHA/SR. P.S.