Income Tax Appellate Tribunal - Kolkata
Pentex Expo Pvt. Ltd., Kolkata vs Department Of Income Tax on 13 February, 2012
आयकर अपीलीय अधीकरण, Ûयायपीठ - "ऐ" कोलकाता,
IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH: KOLKATA
(सम¢)Before ौी ूोमोद कुमार,
मार लेखा सदःय एवं/and ौी महावीर िसंह, Ûयायीक सदःय)
[Before Shri Pramod Kumar, AM & Shri Mahavir Singh, JM]
आयकर अपील संÉया / I.T.A Nos. 394 & 395/Kol/2011
िनधॉरण वषॅ/Assessment Years : 2006-07 & 2007-08
Deputy Commissioner of Income-tax, Vs. M/s. Iris Commercial Pvt. Ltd.
Central Circle-VII, Kolkata. (PAN:AAACI 5557 R)
(अपीलाथȸ/Appellant) (ू×यथȸ/Respondent)
&
आयकर अपील संÉया / I.T.A Nos. 396 to 398/Kol/2011
िनधॉरण वषॅ/Assessment Years : 2005-06 to 2007-08
Deputy Commissioner of Income-tax, Vs. M/s. Nilhat Promoters Fiscal Pvt. Ltd.
Central Circle-VII, Kolkata. (PAN:AABCN 5606 K)
(अपीलाथȸ/Appellant) (ू×यथȸ/Respondent)
&
आयकर अपील संÉया / I.T.A Nos. 399 to 401/Kol/2011
िनधॉरण वषॅ/Assessment Years : 2005-06 to 2007-08
Deputy Commissioner of Income-tax, Vs. M/s.Pentex Expo Pvt. Ltd.
Central Circle-VII, Kolkata. (PAN:AABCP 4861 E)
(अपीलाथȸ/Appellant) (ू×यथȸ/Respondent)
For the Appellant: Shri L. K. S. Dehiya
For the Respondent: Shri Subash Agarwal
Date of hearing: 13.02.2012
Date of pronouncement: .02.2012
आदे श/ORDER
Per Bench:
All these 8 appeals by revenue in respect of 3 different assessees mentioned above are arising out of separate orders of CIT(A), Central-I, Kolkata in Appeal Nos.405/CIT(A).C- 1/CC-VII/08-09 & 249/CIT(A).C-1/CC-VII/09-10 dated 23.12.2010, 391/CIT(A),C-1/CC- VII/08-09, 382/CIT(A),C-1/CC-VII/08-09 & 274/CIT(A),C-1/CC-VII/09-10 dated 22.12.2010 and 400/CIT(A),C-1/CC-VII/08-09, 398/CIT(A),C-1/CC-VII/08-09 & 259/CIT(A),C-1/CC- VII/09-10 dated 20.12.2010. Assessments were framed by DCIT, CC-VII, Kolkata u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for Assessment Years
2 ITA 394-401/K/2011 M/s. Iris Commercial Pvt. Ltd. & Ors.
mentioned above vide his separate orders dated 29.12.2008, 18,12,2009, 31.12.2008, 29.12.2008.30.12.2009, 31.12.2008, 29.12.2008 and 31.12.2009 respectively.
2. In ITA Nos.394, 395, 397, 398,400 and 401/Kol/2011 the following two common grounds, except variance in amount, have been raised by the revenue. We reproduce the grounds from ITA No. 394/Kol/2011:
"1. That in facts and circumstances of the case Ld. CIT(A) had erred in deleting the addition made on protective basis of Rs.10,29,34,000/- by way of ignoring the statement made by the director of the assessee company before DDIT (Inv,), Kolkata.
2. That in facts and circumstances of the case Ld. CIT(A) had erred in deleting the 2% commission income of Rs.20,58,680/- for entry provide by the assessee company which is based on a case unearthed by the DDIT (Inv.), Kolkata decided by the Hon'ble ITAT, Kolkata."
In ITA Nos. 396 and 399/Kol/2011 the following three common grounds, except variance in amount, have been raised by the revenue. We reproduce grounds from ITA No.396/Kol/2011:
"1. That in facts and circumstances of the case Ld. CIT(A) had erred in deleting the addition made on protective basis of Rs.13,03,50,000/- by way of ignoring the statement made by the director of the assessee company before DDIT (Inv,), Kolkata.
2. That in facts and circumstances of the case Ld. CIT(A) had erred in deleting the 2% commission income of Rs.26,07,000/- for entry provide by the assessee company which is based on a case unearthed by the DDIT (Inv.), Kolkata decided by the Hon'ble ITAT, Kolkata.
3. That on the facts and circumstances of the case Ld. CIT(A) had erred in deleting the cash amount of Rs.9,00,000/- deposited in to the Bank without considering the fact that the sources of deposit were not explained before the Assessing Officer."
3. At the outset, at the time of hearing the ld. Counsel appearing on behalf of the assessee has submitted that on exactly similar facts (even the assessment order in all these cases are similarly worded except the amounts) this Tribunal has decided the case against the Revenue in ITA Nos.2009/Kol/2008 in the case of DCIT,CC-VII vs M/s. Ankita Fininvest Pvt. Ltd., 2010/Kol/2008 in the case of DCIT,CC-VII vs M/s.Banshidhar Vyapaar Pvt. Ltd. and 2011/Kol/2008 in the case of DCIT,CC-VII vs M/s.Bakliwal Finvest Pvt. Ltd. all dated 30.04.2010 and ld. CIT(A) has decided the issues placing reliance on this Tribunal's orders. Therefore, the Revenue's appeals are liable to be dismissed.
4. On the other hand, ld. DR appearing on behalf of the Revenue relied on the orders of the AO but conceded the position that these appeals are covered by Tribunal's earlier orders and there is no difference in facts. However, Ld. DR stated that only fact to be recorded is that 3 ITA 394-401/K/2011 M/s. Iris Commercial Pvt. Ltd. & Ors.
the additions are made on the basis of statement made by director of assessee company before DDIT (Inv.), Kolkata.
5. After hearing the rival submissions and on careful perusal of materials available on record it is observed that the facts involved in all the present cases are identical to that of the one decided by this Tribunal in the case of DCIT,CC-VII, Kolkata vs M/s.Ankita Finvest Pvt. Ltd. vide ITA No.2009/Kol/2008 dated 30.04.2010 wherein the facts mentioned by the Tribunal are as under :-
"2. Brief facts of this case are that investigations were carried out by the Director of Investigation (Investigation), Kolkata against certain accommodation entry operators involved in providing accommodation entries to various companies based in Mumbai who used the said funds for payments to Madhepura Mercantile Bank based in Mumbai. Consequent to this, Shri Suresh Kumar Sethi, Director of the assessee company was summoned by the DDIT (Investigation), Kolkata on 15.12.2006 before whom he submitted on oath that he "got cash at equivalent amount from the companies and against the same.. . cheques has been issued". He also gave a detailed list of cheques issued to various Mumbai based companies. However, in the course of scrutiny assessment proceedings, Shri Suresh Kr.Sethi retracted his statement made earlier before the DDIT (Inv.) on 24.12.07 and also filed a sworn affidavit to that effect. The AO has rejected the retraction and observed that investigation conducted by the Investigation Wing revealed that cash was deposited by the assessee company in various bank accounts at 4 to 5 stages earlier. On this basis, he came to the conclusion that cash was received by the assessee company in lieu of cheques given to various companies. He then proceeded to add the entire amount of cheques issued by the assessee to various companies on protective basis holding that the provider of cash to the assessee has to be assessed on substantive basis in respect of the unexplained income in the form of cash provided. In addition to this, the AO added 2% of the entire cheques issued by the assessee being Rs.37,68,518/- in the hands of the assessee holding that the same to be the commission income on the purported accommodation entries. The AO further added Rs.18,40,000/- on account of cash deposited by the assessee in its bank account."
6. On the above facts the relevant findings of the Tribunal are as under :-
"7. After bearing the rival submissions and on careful perusal of the materials available on record, we find that the major addition of Rs.18,84,25,906/- was made by the AO on protective basis on account of the entire cheques issued from the disclosed bank accounts maintained with HDFC Bank and South Indian bank. The addition is made primarily on the view that in the original deposition made before the DDIT (Inv.) by one of the Directors, Sri Suresh Kr. Sethi that he received equivalent cash in lieu of the cheques issued in favour of the Mumbai based companies. From the copy of the deposition placed at page no.8 of the paper book, it is observed that the entire deposition is a computer typed copy, wherein the signature of Mr. Suresh Kr Sethi is placed at the bottom Mr Sethi subsequently retracted his statement by filing affidavit in the course of assessment proceedings In the statement recorded on 24 12 07, he stated before the AO that he has not received any cash from any person on behalf of the investee companies He was forced to depose before the DDIT (Inv) in that way to save himself from harassment and to get immediate peace Therefore, we find no justification on the part of the AO to disbelieve the retraction We further observe that the AO's contention that cash was received from various entities against which cheques were issued by the assessee company is not substantiated in the absence of any material on 4 ITA 394-401/K/2011 M/s. Iris Commercial Pvt. Ltd. & Ors.
record to this extent. The fact that the investment made by the assessee in the share capital of other companies is recorded in the books of the assessee and all the transactions made by the assessee are through his disclosed books of accounts and since, this fact was also not controverted by the Ld. DR, appearing before us, we find no justification on the part of the AO to make the investments made by the assessee company, based on the statement recorded by the DDIT (Inv.) without corroborative evidence. The AO has not stated the provision of the Act under which the addition has been made. The possible provision, under which the addition for unexplained investment can be made, is section 69 of the I.T. Act. We observe that the pre-condition for invoking' the provisions of section 69 is that the investments in question are not recorded in the books of accounts maintained by the assessee Since, in the instant case, all investments were recorded in the books of the assessee, there was no warrant for the AO to make additions in respect of such investments, that too, on protective basis. Therefore, we uphold the order of the Ld. CIT(A) and dismiss the issue no.1 raised by the Revenue.
7 1. As regarding issue no 2 is concerned, since we have already held that there is no substantial material on record to the AO's contention that cash was received from various entities against which the cheques were issued by the assessee company, there will not be any presumptive income in the form of commission. Therefore, we hold that the Ld. CIT(A) was justified in deleting the commission income estimated by the AO for the alleged accommodation entries provided. Hence, this issue of the Revenue is also dismissed.
7.2. As regarding the issue no.3, we hold that there is no merit in this addition also which was made by the AO in regard to the deposit of cash of Rs. 18,40,000/- in the bank accounts of the assessee. The AO has not disputed the fact that the books of accounts were produced before him. From the extract of the cash book, placed at page no. 17 of the paper book, we find that sufficient funds were available with the assessee company for deposits made in the bank accounts, therefore, we confirm the action of the Ld.CIT(A) on this issue and dismiss the issue no.3 raised by the assessee."
7. It is further observed that ld. CIT(A) has allowed the appeal of assessee following the decision of this Tribunal in the case of M/s. Ankita Finvest Pvt. Ltd. (supra) by observing as under :-
"3.4. Considering above facts it is held that the addition made by the A.O. is not supported by any corroborative or supportive evidence. In Shrishail Nageshi Pare v. State of Maharashtra AIR 1985 SC 866, the Hon'ble Supreme Court has held that, the retracted confession by an accused may form the basis of conviction of that accused if it receives some general corroboration from other independent sources. However in the case under consideration no evidence has been brought on record to prove that the transaction declared in the books of the assessee is not correct. Moreover even if the retracted statement is made sole basis of addition, then also, there was no basis to make protective addition in the hand of the assessee. Hence considering above and respectfully following the order of the Hon'ble ITAT in the case of M/s. Ankita Finvest Pvt. Ltd. (I.T.A. No.2009(Kol) of 2008. A.Y. 2005-06, dt.30.04.2010), M/s. Bansidhar Vyapaar Pvt. Ltd. (I.T.A.No.2010(Kol) of 2008, A.Y. 2005-06, dt. 30.04.2010) and M/s. Bakliwal Finvest Pvt. Ltd. (I.T.A. No.2011 (Kol) of 2008 A.Y.2005-06, dt. 30.04.2010) on identical additions made by the A.O. considering identical facts, the ground no.2 to 4 taken by the appellant is allowed and addition made by the A.O. on account of unexplained income Rs.10,70,27,500/- on protective basis and Rs.21,40,550/- on account of commission is deleted.
5 ITA 394-401/K/2011 M/s. Iris Commercial Pvt. Ltd. & Ors.
4.1. I have carefully considered the submission of the ld. A.R. The A.O. has not disputed the fact that the books of accounts were produced before him from the extract of the cash book filed, it is apparent that sufficient funds were available with the assessee company for deposits made in the bank accounts, therefore ground no.5 taken by the appellant is allowed and addition of Rs.2,00,000/- is deleted."
8. Since CIT(A) has followed the decision of this Tribunal and the ld. DR also could not bring out any contrary decision/facts to that of the one decided by this Tribunal, we find no infirmity in the orders of CIT(A) and the same is hereby upheld. Therefore, all the appeals of the Revenue are dismissed.
9. In the result, appeals of revenue are dismissed.
10. Order pronounced in open court on 29.02.2012.
Sd/- Sd/-
ूोमोद कुमार,
मार लेखा सदःय महावीर िसंह, Ûयायीक सदःय
(Pramod Kumar) (Mahavir Singh)
Accountant Member Judicial Member
तारȣख)
तारȣख) Dated : 29th February, 2012
(तारȣख
वǐरƵ िनǔज सिचव Jd.(Sr.P.S.)
आदे श कȧ ूितिलǒप अमेǒषतः- Copy of the order forwarded to:
1. अपीलाथȸ/APPELLANT - DCIT, Central Circle-VII, Kolkata.
2 ू×यथȸ/ Respondent, M/s. Iris Commercial Pvt. Ltd., 47, Kali Krishna Tagore St., Kolkata-700 007.
M/s. Nilhat Promoters Fiscal Pvt. Ltd., 205, Rabindra Sarani, Kolkata-700
007. M/s. Pentex Expo Pvt. Ltd., 1, R. N. Mukherjee Road, 5th floor, Room No. 45B, Kolkata-700 001.
3. आयकर किमशनर (अपील)/ The CIT(A), Kolkata
4. आयकर किमशनर/CIT, Kolkata
5. वभािगय ूितनीधी / DR, Kolkata Benches, Kolkata स×याǒपत ूित/True Copy, आदे शानुसार/ By order, सहायक पंजीकार/Asstt. Registrar.