Income Tax Appellate Tribunal - Kolkata
I.T.O.,Ward-11(1), Kolkata vs M/S S.M.Hotel Industries Pvt. Ltd., ... on 12 December, 2022
IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH KOLKATA
आयकरअपीलीयअधीकरण, ायपीठ "A"कोलकाता,
BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT
AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER
ITA No.88/Kol/2020
Assessment Year: 2012-13
Income Tax Officer, Ward- M/s. S. M. Hotel Industries
11(1), Kolkata. Pvt. Ltd., Flat No. 1C, 14A,
Vs.
Burdwan Road, Alipore,
Kolkata-700027.
(PAN: AADCS8306F)
(Appellant) (Respondent)
Present for:
Appellant by : Shri AkkalDudhewala, FCA
Respondent by : Shri Vijay Kumar, Addl., CIT, Sr. DR
Date of Hearing : 18.10.2022
Date of Pronouncement : 12.12.2022
ORDER
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
This appeal filed by the revenue is against the order of Ld. CIT(A)-4, Kolkata vide Appeal No. 35/CIT(A)-4/2015-16 dated 29.11.2019 passed against the assessment order by the ITO, Ward- 15(3), Kolkata u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the "Act") dated 30.03.2015.
2. Grounds of appeal raised by the revenue read as under:
"1. That on the facts and circumstances of the case, Ld. CIT(A)-4, Kolkata erred in deleting the addition made the AO amounting to Rs.2,40,65,000/- u/s. 68 of the Income Tax Act, 1961 without considering creditworthiness of the transactions.
2. Whether in the facts & circumstances of the case and law, the Ld. CIT(A)-4, Kolkata erred in allowing relief to the assessee by accepting additional S.M. Hotel Industries Pvt. Ltd.ITA No.88/Kol/2020
AY 2012-13 evidence during appeal, without calling for a remand report from the A0 and without providing him an opportunity under Rule 46A."
3. Brief facts of the case are that assessee filed its return of income on 08.01.2013 reporting total income at ₹1,150/-. The case was selected for scrutiny assessment under CASS for which statutory notices were issued and served on the assessee which were duly complied with. In the course of assessment it was noted that assessee had raised capital by the issue of 48,130 shares having face value of ₹10/- each with a premium of ₹490/- per share, aggregating to ₹2,40,65,000/-. Details of shares application money received by the assessee during the year under consideration and number of shares allotted to each of the subscribers is tabulated below which is also reproduced in the order of Ld. CIT(A).
2S.M. Hotel Industries Pvt. Ltd.
ITA No.88/Kol/2020AY 2012-13
4. Shri Sudhir Satnaliwala is the director of assessee company. He is also the common director of above mentioned 12 companies to whom shares were allotted by the assessee Ld. AO had issued summon u/s 131 of the Act to produce the director of the assessee company as well as director of the share allotted companies along with their proof of identity, copy of income tax return and bank statement. In response to the summon, Shri Sudhir Satnaliwal, director of the assessee appeared before the Ld. AO. He is also the common director of all the 12 allottee companies, as noted by the Ld. AO. Statement of Shri Sudhir Satnaliwala was recorded by the Ld. AO on behalf of the assessee company as well as also as the director of the above stated 12 allottee companies. In the statement recorded, issue of shares allotted to the 12 companies was confirmed. Ld. AO also noted the fact that Shri Sudhir Satnaliwala is running his proprietorship business of hotel in the name of 'Check-in Check-out' where from he deposited money in the various allottee companies. In the course of assessment, Ld. AO by raising the objections in respect of transaction being locked genuine, no justification for use premium, allottee companies having hardly any business and non-establishment of creditworthiness of the 12 allottee companies treated the amount of share capital including share premium as unexplained within the meaning of section 68 of the Act and added to the total income of the assessee. Aggrieved assessee went in appeal before the Ld. CIT(A).
5. In the course of first appellate proceedings, Ld. CIT(A) noted that Shri Sudhir Satnaliwala runs a hotel through his proprietorship concern known as 'Check-in Check-out'. This proprietorship concern had 12 dwelling units which together constituted the said hotel. Each of these 12 bailing units are proportionately owned by 12 above listed allottee companies. Shri Sudhir Satnaliwala runs the hotel and he is 3 S.M. Hotel Industries Pvt. Ltd.
ITA No.88/Kol/2020AY 2012-13 the common director in all the 12 allottee companies as well as director in the assessee company along with other family members. Ld. CIT(A) also noted that Shri Sudhir Satnaliwala gave security deposits from his proprietary concern 'Check-in Check-out' for lease agreement in respect of the dwelling units owned by the 12 allottee companies. These 12 allottee companies after receiving the secretary deposit amount gave it to the assessee company towards allotment of its share capital. All these transactions took place through banking channels, genuineness of which has not been doubted. It is pertinent to take note of the fact that assessment of Shri Sudhir Satnaliwala for AY 2012-13 was completed u/s 143(3) of the Act vide order dated 12.02.2015 wherein no adverse view has been taken by the concerned Assessing Ofc in respect of the payment of security deposit by him through his proprietary concern to the 12 allottee companies who in turn invested the same in the assessee company. All these transactions have been duly disclosed and verified by the concerned Assessing Officer which were reported in his balance sheet, placed on record. Assessment order of Shri Sudhir Satnaliwala has been reproduced in the order of Ld. CIT(A) at page 8. Ld. CIT(A) also took note of the fact that other major source of funds that came to the assessee was Rose Financiers & Commercials Pvt. Ltd. which has also been assessed under section 143(3) of the Act for AY 2012-13. After being satisfied about the identity, creditworthiness and genuineness of the transaction of allotment of shares to the 12 allottee companies, Ld. CIT(A) allowed the appeal of the assessee. Aggrieved, revenue is in appeal before the Tribunal.
6. Before us, Shri AkkalDudhewala, FCA represented the assessee and Shri Vijay Kumar, Addln. CIT DR represented the Department. Ld. Counsel for the assessee has placed on record a paper book 4 S.M. Hotel Industries Pvt. Ltd.
ITA No.88/Kol/2020AY 2012-13 containing 216 pages in respect of support of his claim in the instant appeal.
7. Ld. Counsel for the assessee reiterated the submissions made before the authorities below which are not repeated for the sake of brevity. Additionally he pointed to the balance sheet of the proprietary concern of Shri Sudhir Satnaliwalaas on 31.03.2012, placed in the paper book from page 205. He pointed out to the fact that secured loans were availed in the proprietary concern from HDFC Bank and Aditya Birla Finance Ltd, closing balance of which reported in the said balance sheet was Act ₹7,47,19,770/-. He then submitted that this secured loan was utilised in giving security deposit to the 12 allottee companies against the lease agreement for the 12 dwelling units, closing balance of which in the said balance sheet was at ₹5,27,14,086/-. He submitted that the 12 allottee companies are holding the ownership rights in the land over which the hotel setup of 'Check-in Check-out' exist. He thus emphasised on the fact that source of source in respect of the share capital and share premium raised by the assessee by issuing its shares to the 12 allottee companies is evidently corroborated.
8. Per contra, Ld. Senior DR placed reliance on the order of Ld. AO who had doubted on the creditworthiness of the 12 allottee companies.
9. We have heard the rival contentions and perused the material on record. It is an admitted fact that Shri Sudhir Satnaliwala is a director common in the assessee company as well as the 12 allottee companies along with other family members. He appeared before the Ld. AO in response to summon issued under section 131 of the Act and 5 S.M. Hotel Industries Pvt. Ltd.
ITA No.88/Kol/2020AY 2012-13 complied with all the required details and documentation. We also take note of the fact that assessment of Shri Sudhir Satnaliwala for AY 2012-13 has been completed without any adverse observation and addition, u/s 143(3) of the Act. Financial statements of Shri Sudhir Satnaliwala were on record which has been accepted in his assessment wherein transaction relating to taking of secured loans from HDFC Bank and Aditya Birla Finance Ltd and giving of security deposits to the 12 allottee companies for securing the lease arrangement in respect of 12 dwelling units from the 12 allottee companies, has been duly reported. We also note that in the paper book all the documents pertaining to share capital transaction with all the 12 allottee companies are placed on record.
10. Considering the factual matrix of the present case wherein investment made by the 12 allottee companies has been duly established with corroborative evidence is on record, more particularly when the concerned Assessing Officer in the assessment order of Shri Sudhir Satnaliwala (common director for all) passed under section 143(3) of the Act, has accepted the same, we do not find any reason to interfere with the facts-based finding given by the Ld. CIT(A). Accordingly, grounds taken by the Revenue in this respect are dismissed.
11. In the result, the appeal of the Revenue is dismissed.
Order pronounce d in the open Court on 12 t h December,2022 Sd/- Sd/-
(Rajpal Yadav) (Girish Agrawal)
Vice President Accountant Member
Dated: 12 t h December, 2022
JD, Sr. P.S.
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S.M. Hotel Industries Pvt. Ltd.
ITA No.88/Kol/2020
AY 2012-13
Copy to:
1. The Appellant:
2. The Respondent:.
3. CIT(A)-4 Kolkata
4. The Pr. CIT, Kolkata.
5. DR, ITAT, Kolkata Bench, Kolkata
//True Copy//
By Order
Assistant Registrar
ITAT, Kolkata Benches, Kolkata
1. Date of dictation- 21/11/2022 (draft prepared by AM himself in his laptop)
2. Date on which the typed draft order is placed before the Dictating Member and Other member 21/11/2022
3. Date on which the approved order comes to the Sr. P.S./P.S. - /11/2022
4. Date on which the file goes to the Bench Clerk /11/2022
5. Date on which the file goes to the O.S. ..................................
6. Date of Dispatch of the Order......................
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