Income Tax Appellate Tribunal - Kolkata
Dcit, Circle - 8(1) , Kolkata vs M/S. Gem Forgings Pvt. Ltd., , Kolkata on 4 September, 2020
IN THE INCOME TAX APPELLATE TRIBUNAL
KOLKATA 'C' BENCH, KOLKATA
(Before Sri J. Sudhakar Reddy, Hon'ble Accountant Member & Sri Aby T. Varkey, Hon'ble Judicial Member)
[VIRTUAL COURT HEARING]
ITA No. 2512/Kol/2018
Assessment Years: 2012-13
Deputy Commissioner of Income Tax, Circle-8(1), Kolkata..............................................Appellant
Vs.
M/s. Gem Forgings Private Limited.................................................................................Respondent
10C, Middleton Row
Kolkata - 700071
[PAN : AAACI 5499 Q]
ITA No. 2423/Kol/2018
Assessment Years: 2011-12
M/s. Gem Forgings Private Limited.....................................................................................Appellant
10C, Middleton Row
Kolkata - 700071
[PAN : AAACI 5499 Q]
Vs.
Deputy Commissioner of Income Tax, Circle-8(1), Kolkata ......................................Respondent
Appearances by:
Shri Miraj D. Shah, A/R & Shri Ashish Rastogi, A/R, appeared on behalf of the assessee.
Shri Supriyo Pal, Addl. CIT D/R, appearing on behalf of the Revenue.
Date of concluding the hearing : July 21st, 2020
Date of pronouncing the order : September 4th, 2020
ORDER
Per J. Sudhakar Reddy, AM :-
These are cross-appeals directed against the order of the Learned Commissioner of Income Tax (Appeals) -3, Kolkata, (hereinafter the "ld.CIT(A)"), passed u/s. 250 of the Income Tax Act, 1961 (the 'Act'), dt. 20/09/2018, for the Assessment Year 2012-13.
2. The assessee is a company and is in the business exporting tea processing machines, medical equipments & consumables and electric pole line hardware items. It filed its return of income declaring total income of Rs.56,34,611/- on 29/09/2012 for the Assessment Year 2012-13. The ld. Assessing Officer completed the assessment u/s 143(3) of the Act on 29/03/2015 determining the total income of the assessee at Rs. 4,03,09,097/- interalia making an addition of Rs.3,02,02,212/- u/s 68 of the Act and 2 ITA No. 2512/Kol/2018 Assessment Years: 2012-13 ITA No. 2423/Kol/2018 Assessment Years: 2011-12 M/s. Gem Forging Private Limited disallowance of Rs.39,28,424/ Rs.39,28,424/- u/s 14A r.w.r. 8D (2)(ii)
i) of the Income Tax Rules, 1962 ('Rules').
2.1. Aggrieved the assessee carried the matter in appeal. The ld. First Appellate Authority restricted the disallowance u/s 14A r.w.r. 8D to the suo moto disallowance made by the assessee, as the dividend receive receivedd by the assessee during the year was Rs.163/- only.. On the issue of additions u/s 68 of the Act, the ld. CIT(A) granted part relief after obtaining a remand report from the Assessing Officer.
3. Aggrieved with the part deletion of the additions made u/s 68 of the Act, by the ld. CIT(A), the revenue has filed this appeal. The revenue also disputes the deletion of disallowance u/s 14A r.w.r. 8D. The assessee has filed its appeal disputing the additions to the extent confirmed u/s 68 of th the Act, by the ld. CIT(A).
4. We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows:
follows:-
5. On the issue ssue of deletion of disallowance u/s 14A r.w.r. 8D, we find that the assessee has suo moto disallowed an amount of Rs.2,60,861/ Rs.2,60,861/-.. The ld. CIT(A) restricted the disallowance to the extent of suo moto disallowance as the exempt income earned was only Rs.163/- by relying on the judgment of the Hon'ble Delhi High Court in the case of Joint Investment Pvt. Ltd. in ITA No. 117/2015, judgment dt. 25/02/2015. The Court has held that the disallowance u/s 14A of the Act, cannot exceed the amount of exempt income. The Hon'ble Jurisdictional High Court in the case of CIT vs. REI Agro Pvt. Ltd. in G.A. 3022 of 2013 ITAT TAT 161 of 2013, dt. 23rd December, 2013 as well as CIT vs. Ashika Global Securities Ltd. in ITAT 100 of 2014, GA No. 2122 of 2014, has laid down similar ilar proposition of law. Hence we find no infirmity in the order of the ld. CIT(A) and dismiss this ground of the revenue.
6. We now take up the grounds of the assessee as well as the revenue on each of the additions/deletions made u/s 68 of the Act by the Assessing Officer.
3 ITA No. 2512/Kol/2018Assessment Years: 2012-13 ITA No. 2423/Kol/2018 Assessment Years: 2011-12 M/s. Gem Forging Private Limited
7. We consider the documents and other details filed by eeach ach of the investment companies, in support of the identity, creditworthiness of the company and the genuineness of the transactions.
transactions.:-
1) M/s Norflox Vincom Private Limited Limited:: This Company had given a loan Rs.30,00,000/- to the assessee company, which was received during the financial year 2011-2012 on 10/05/2011 10/05/2011.. The loan was made by account payee cheque.
This company was incorporated on 16/12/1994 and was having company identification number U51900WB1994PTC066660 U51900WB1994PTC066660.. This company duly filed its return of income before ITO Ward 1(2),, Kolkata and was having PAN AAACN8942R.. This company was having a paid up capital with free reserves and surplus of Rs.22,37,35,469/ Rs.22,37,35,469/- as on 31/03/2012 and Rs.22,30,80,171/-
Rs.22,30,80,171/ as on 31/03/2011 respectively. The said loan was repaid on 09/09/2011.
09/09/2011 The copy of the Ledger account, TDS, Audited Accounts, IT Return and other documents have been filed before us in the paper book book. The details of source of funds from which this company had made the loan are also available in the paper book. All the relevant documents for this company are available on pages 65-74 65 of the paper book. A perusal of the same takes us to a conclusion that the assessee has proved the identity ntity and creditworthiness of the lender company as well as the genuineness of the transaction.
2) M/s High Rise Plaza Private Limited Limited:: This Company had given a loan Rs.25,00,000/- to the assessee company, which was received during the financial year 2011-2012 on 30/05/2011 30/05/2011.. The loan was made by account payee cheque. This company was incorporated on 16/06/1998 and was having company identification number U45201WB1998PTC087348 U45201WB1998PTC087348.. This company duly filed its return of income before ITO Ward 5(4), Kolkata and nd was having PAN AABCH5468D.. This company was having a paid up capital with free reserves and surplus of Rs.1,18,58,958/ Rs.1,18,58,958/- as on 31/03/2012 and Rs.1,14,59,083/-
Rs.1,14,59,083/ as on 31/03/2011 respectively. The said loan was repaid on 13/04/2015. The copy of 4 ITA No. 2512/Kol/2018 Assessment Years: 2012-13 ITA No. 2423/Kol/2018 Assessment Years: 2011-12 M/s. Gem Forging Private Limited the Ledger account, ccount, TDS, Audited Accounts, IT Return and other documents have been filed before us in the paper book book. The details of source of funds from which this company had made the loan are also available in the paper book. All the relevant documents for this co company are available on pages 144-167 144 of the paper book. A perusal of the same takes us to a conclusion that the assessee has proved the identity and creditworthiness of the lender company as well as the genuineness of the transaction.
3) M/s Gunjan Marketing Private Limited:: This Company had given a loan Rs.50,00,000/- to the assessee company, which was received during the financial year 2011-2012 on 21/05/2011 21/05/2011.. The loan was made by account payee cheque. This company was incorporated on 25/03/1996 and was having hav company identification number U51109WB1996PTC078405 U51109WB1996PTC078405.. This company duly filed its return of income before ITO Ward 6(2),, Kolkata and was having PAN AABCG1373Q.. This company was having a paid up capital with free reserves and surplus of Rs.12,07,72,511/ Rs.12,07,72,511/- as on 31/03/2012 and Rs.11,84,67,672/-
Rs.11,84,67,672/ as on 31/03/2011 respectively. The said loan was repaid on 20/09/2011.
20/09/2011 The copy of the Ledger account, TDS, Audited Accounts, IT Return and other documents have been filed before us in the paper book book. The details of source of funds from which this company had made the loan are also available in the paper book. All the relevant documents for this company are available on pages 121-143 121 of the paper book. A perusal of the same takes us to a conclusion that the assessee has proved the identity and creditworthiness of the lender company as well as the genuineness of the transaction.
4) M/s Positive Management Private Limited Limited:: This Company had given a loan Rs.50,00,000/- to the assessee company, which was received during the financial year 2011-2012 on 25/05/2011 25/05/2011.. The loan was made by account payee cheque. This company was incorporated on 10/02/1994 and was having company identification number U74140WB1994PTC061 U74140WB1994PTC061773.. This company duly filed its 5 ITA No. 2512/Kol/2018 Assessment Years: 2012-13 ITA No. 2423/Kol/2018 Assessment Years: 2011-12 M/s. Gem Forging Private Limited return of income before ITO Ward 1(2),, Kolkata and was having PAN AACCP2819D.. This company was having a paid up capital with free reserves and surplus of Rs.16,55,976 //- as on 31/03/2012 and Rs.16,53,056/-
Rs.16,53,056/ as on 31/03/2011 respectively. The said loan was repaid on 26/08/2011.
26/08/2011 The copy of the Ledger account, TDS, Audited Accounts, IT Return and other documents have been filed before us in the paper book book. The details of source of funds from which this company had made the loa loann are also available in the paper book. All the relevant documents for this company are available on pages 191-212 191 of the paper book. A perusal of the same takes us to a conclusion that the assessee has proved the identity and creditworthiness of the lende lenderr company as well as the genuineness of the transaction.
5) M/s Selsett lsett Vanijya Private Limited Limited:: This Company had given a loan Rs.10,00,000/- to the assessee company, which was received during the financial year 2011-2012 on 19/05/2011 19/05/2011.. The loan was made by account payee cheque. This company was incorporated on 30/03/1995 and was having company identification number U51109WB1995PTC070407 U51109WB1995PTC070407.. This company duly filed its return of income before ITO Ward 1(3),, Kolkata and was having PAN AADCS7129Q.. This company was having a paid up capital with free reserves and surplus of Rs.1,92,46,679/ Rs.1,92,46,679/- as on 31/03/2012 and Rs.1,12,43,307/-
Rs.1,12,43,307/ as on 31/03/2011 respectively. The said loan was repaid on 26/09/2011.
26/09/2011 The copy of the Ledger account, TDS, Audited Accounts, IT Return and other documents have been filed before us in the paper book book. The details of source of funds from which this company had made the loan are also available in the paper book. All the relevant vant documents for this company are available on pages 6-25 6 of the paper book. A perusal of the same takes us to a conclusion that the assessee has proved the identity and creditworthiness of the lender company as well as the genuineness of the transaction.
6 ITA No. 2512/Kol/2018Assessment Years: 2012-13 ITA No. 2423/Kol/2018 Assessment Years: 2011-12 M/s. Gem Forging Private Limited
6) M/s Anurag Finvest Private Limited Limited:: This Company had given a loan Rs.7,50,000/- and Rs.17,50,000/ Rs.17,50,000/- to the assessee company, which was received on 02/07/2010 and 05/07/2010 respectively. The loan was made by account payee cheque. This company was incorp incorporated on 13/03/1995 and was having company identification number U65921MH1995PTC086411.. This company duly filed its return of income before ITO Ward 12(3),, Kolkata and was having PAN AACCA1611N.. This company was having a paid up capital with free reserves and surplus of Rs.11,13,15,592/ Rs.11,13,15,592/- as on 31/03/2012 and Rs.9,26,01,808/-
Rs.9,26,01,808/ as on 31/03/2011 respectively. The said loan was repaid on 16/11/2015. The copy of the Ledger account, TDS, Audited Accounts, IT Return and other documents have been filed before us in the paper book. The details of source of funds from which this company had made the loan are also available in the paper book. All the relevant documents for this company are available on pages 75--120 of the paper book. A perusal of the same takes us to a conclusion that the assessee has proved the identity and creditworthiness of the lender company as well as the genuineness of the transaction.
7) M/s Rajshree Solutions Private Limited Limited:: This Company had given a loan Rs.35,00,000/- to the assessee company, which was received during the financial year 2011-2012 on 19/11/2011 19/11/2011.. The loan was made by account payee cheque. This company was incorporated on 06/08/2009 and was having company identification number U74140WB2009PTC137550 U74140WB2009PTC137550. This company duly filed its return of income before ITO Ward 1(1),, Kolkata and was having PAN AAECR4954P.. This company was having a paid up capital with free reserves and surplus of Rs.62,83,42,028/ Rs.62,83,42,028/- as on 31/03/2012 and Rs.74,835/-
Rs.74,835/ as on 31/03/2011 respectivel respectively. The said loan was repaid on 03/10/2015. The copy of the Ledger account, TDS, Audited Accounts, IT Return and other documents have been filed before us in the paper book book. The details of source of funds from which this company had made the loan are also available in the paper book. All the relevant documents for this company are available on pages 213-233 213 of the paper 7 ITA No. 2512/Kol/2018 Assessment Years: 2012-13 ITA No. 2423/Kol/2018 Assessment Years: 2011-12 M/s. Gem Forging Private Limited book. The statement recorded u/s 131 of the Income Tax Act,1961 by the loan creditors and/or their reply u/s 133(6) of the Income Tax Act,1 Act,1961 961 before the Ld AO is available on page 258 to 261 of the paper book. A perusal of the same takes us to a conclusion that the assessee has proved the identity and creditworthiness of the lender company as well as the genuineness of the transaction.
8) M/s Nirman man Fiscal Services Private Limited Limited:: This Company had given a loan Rs.15,00,000/- to the assessee company, which was received during the financial year 2011-2012 on 07/06/2011 07/06/2011.. The loan was made by account payee cheque. This company was incorporated on 21/10/1994 and was having company identification number U65910WB1994PTC065562 U65910WB1994PTC065562.. This company duly filed its return of income before ITO Ward 1(3),, Kolkata and was having PAN AABCN1549H.. This company was having a paid up capital with free reserves and surplus of Rs.77,94,28,896/ Rs.77,94,28,896/- as on 31/03/2012 and Rs.7,95,79,157/-
Rs.7,95,79,157/ as on 31/03/2011 respectively. The said loan was repaid on 11/03/2015. The copy of the Ledger account, TDS, Audited Accoun Accounts, ts, IT Return and other documents have been filed before us in the paper book book. The details of source of funds from which this company had made the loan are also available in the paper book. All the relevant documents for this company are available on page pages 47-64 47 of the paper book. The statement recorded u/s 131 of the Income Tax Act,1961 by the loan creditors and/or their reply u/s 133(6) of the Income Tax Act,1961 before the Ld AO is available on page 262 to 266 & 277-278 of the paper book. A perusal of the same takes us to a conclusion that the assessee has proved the identity and creditworthiness of the lender company as well as the genuineness of the transaction.
9) M/s B.P.Builders Private Limited Limited:: This Company had given a loan Rs.35,00,000/- to the asse assessee ssee company, which was received during the financial year 2011-2012 on 09/06/2011 09/06/2011.. The loan was made by account payee cheque. This company was incorporated on 15/01/2008 and was having company 8 ITA No. 2512/Kol/2018 Assessment Years: 2012-13 ITA No. 2423/Kol/2018 Assessment Years: 2011-12 M/s. Gem Forging Private Limited identification number U45400WB2008PTC121741 U45400WB2008PTC121741.. This company duly filed its return of income before ITO Ward 5(3),, Kolkata and was having PAN AADCB3228M.. This company was having a paid up capital with free reserves and surplus of Rs.6,40,87,896/ Rs.6,40,87,896/- as on 31/03/2012 and Rs.3,09,19,171/-
Rs.3,09,19,171/ as on 31/03/2011 respectively. The ssaid loan was repaid on 31/03/2015. The copy of the Ledger account, TDS, Audited Accounts, IT Return and other documents have been filed before us in the paper book. The details of source of funds from which this company had made the loan are also availabl availablee in the paper book. All the relevant documents for this company are available on pages 26-46 26 of the paper book. The statement recorded u/s 131 of the Income Tax Act,1961 by the loan creditors and/or their reply u/s 133(6) of the Income Tax Act,1961 before the Ld AO is available on page 262 to 266 & 273-274 of the paper book.
book A perusal of the same takes us to a conclusion that the assessee has proved the identity and creditworthiness of the lender company as well as the genuineness of the transaction.
10) M/s Index Tie-Up Up Private Limited Limited:: This Company had given a loan Rs.10,00,000/- to the assessee co company, mpany, which was received during the financial year 2011-2012 on 21/07/2011 21/07/2011.. The loan was made by account payee cheque. This company was incorporated on 09/09/2008 and was having company identification number U51909WB2008PTC129204 U51909WB2008PTC129204.. This company duly filed its return of income before ITO Ward 2(1),, Kolkata and was having PAN AABCI9583N.. This company was having a paid up capital with free reserves and surplus of Rs.13,12,39,386/ Rs.13,12,39,386/- as on 31/03/2012 and Rs.12,16,24,256/-
Rs.12,16,24,256/ as on 31/03/2011 respectively. The said lloan was repaid on 13/11/2015. The copy of the Ledger account, TDS, Audited Accounts, IT Return and other documents have been filed before us in the paper book book. The details of source of funds from which this company had made the loan are also available in the paper book. All the relevant documents for this company are available on pages 168-190 168 of the paper book. The statement recorded u/s 131 of the Income Tax Act,1961 by the loan 9 ITA No. 2512/Kol/2018 Assessment Years: 2012-13 ITA No. 2423/Kol/2018 Assessment Years: 2011-12 M/s. Gem Forging Private Limited creditors and/or their reply u/s 133(6) of the Income Tax Act,1961 before th the Ld AO is available on page 267 to 270 & 271-272 of the paper book. A perusal of the same takes us to a conclusion that the assessee has proved the identity and creditworthiness of the lender company as well as the genuineness of the transaction.
11) M/s Trishna Distributors Private Limited:: This Company had given a loan Rs.24,00,000/- to the assessee company, which was received during the financial year 2011-2012 on 22/07/2011 22/07/2011.. The loan was made by account payee cheque. This company was incorporated on 14/01/2009 and was having company identification number U51101WB2009PTC131971 U51101WB2009PTC131971.. This company duly filed its return of income before ITO Ward 1(3),, Kolkata and was having PAN AADCT1086F.. This company was having a paid up capital with free reserves and surplus of Rs.5,84,12,216/ Rs.5,84,12,216/- as on 31/03/2012 and Rs.5,84,13,817/-
Rs.5,84,13,817/ as on 31/03/2011 respectively. The copy of the Ledger account, TDS, Audited Accounts, IT Return and other documents have been filed before us in the paper book. The details of source of funds from which this company had made the loan are also filed in the paper book. All the relevant documents for this company are available on pages 234-257 of the paper book. The statement recorded u/s 131 of the Income Tax Act,1961 by the loan creditors and/or thei theirr reply u/s 133(6) of the Income Tax Act,1961 before the Ld AO is available on page 275-276 of the paper book. A perusal of the same takes us to a conclusion that the assessee has proved the identity and creditworthiness of the lender company as well as th the genuineness of the transaction.
8. We find that all these credits were loans which were repaid with interest after deducting tax at source. The assessee in our view has discharged the onus that lay on it. The statement and the evidences filed by the creditor companies prove the identity, genuineness and creditworthiness of the loan creditors. No evidence to disprove the claim of the assessee is brought on record by the Assessing Officer Officer.. Hence, we have to 10 ITA No. 2512/Kol/2018 Assessment Years: 2012-13 ITA No. 2423/Kol/2018 Assessment Years: 2011-12 M/s. Gem Forging Private Limited necessarily ecessarily delete the additions u/s 68 of the A Act, ct, confirmed by the ld. CIT(A) and to uphold the deletion of addition by the ld. CIT(A).
9. In the result, appeal of the revenue is dismissed and the cross cross-appeal of the assessee is allowed.
Kolkata, the 4th day of September, 2020.
Sd/- Sd/-
[Aby T. Varkey] [J.
J. Sudhakar Reddy]
Reddy
Judicial Member Accountant Member
Dated : 04.09.2020
{SC SPS}
Copy of the order forwarded to:
1. M/s. Gem Forgings Private Limited
10C, Middleton Row
Kolkata - 700071
2. Deputy Commissioner of Income Tax, Circle Circle-8(1), Kolkata
3. CIT(A)-
4. CIT- ,
5. CIT(DR), Kolkata Benches, Kolkata.
True copy By order Assistant Registrar ITAT, Kolkata Benches