A) Whether On The Facts And In The Circumstances Of The Case The Learnedincome Tax Appellate Tribunal Erred In Law In Granting Relief To Theincome Tax Appellate v. Mainak Suppliers Pvt Ltd

ITAT/253/2023 IA No.GA/2/2023 IN THE HIGH COURT AT CALCUTTASpecial Jurisdiction (Income Tax)ORIGINAL SIDE PRINCIPAL COMMISSIONER OF INCOME TAX 1, KOLKATAVs MAINAK SUPPLIERS PVT. LTD. BEFORE: The Hon'ble JUSTICE T.S. SIVAGNANAM The Hon'ble JUSTICE SUPRATIM BHATTACHARYA Date : 31[st ]January, 2024 Appearance:Mr. Vipul Kundalia, Adv.Mr. Prithu Dudhoria, Adv.…for the appellant. Mr. Avra Mazumder, Adv.Mr. Samrat Das, Adv...for the respondent The Court:- This appeal filed by the revenue under Section 260A of theIncome Tax Act, 1961 (the Act) is directed against the order dated 28[th] December,2022 passed by the Income Tax Appellate Tribunal, “C” Bench, Kolkata (theTribunal) in ITA No.38/Kol/2021 for the assessment year 2009-10. The revenue has raised the following substantial questions of law forconsideration :- (a) Whether on the facts and in the circumstances of the case the LearnedIncome Tax Appellate Tribunal erred in law in granting relief to theIncome Tax Appellate Tribunal erred in law in granting relief to the assessee and uphold the order of CIT(A) on account of addition of onundisclosed cash credit under Section 68 of the IT Act, 1961 ofRs.21,08,00,000/- without considering the fact that assessee has failedto prove the identity of the subscribers, genuineness of transaction andcreditworthiness of the subscribers? (b) Whether on the facts and in the circumstances of the case the LearnedIncome Tax Appellate Tribunal erred in law in not considering the aspectof Section 68 of the Act and upheld the CIT(A)’s order by not consideringthe principle which has been laid down by the Hon’ble Supreme Court inthe case of Pr. CIT, Central-1, Delhi Vs. NRA Iron & Steel Pvt. Ltd. 412 ITR161(SC) which holds that if the enquiries and investigations revealed theidentity of the creditors to be dubious or doubtful or lackingcreditworthiness, then genuineness of the transaction would not beestablished, in such a case the assessee would not have discharged theprimary onus contemplated under Section 68 of the Act. In the facts ofthe case the learned ITAT completely ignored such aspects. Thuslearned ITAT has erred in giving relief to the assessee and unholding theorder of CIT(A). (c)Whether on the facts and in the circumstances of the case the learnedIncome Tax Appellate Tribunal erred in law in upholding the order ofCIT(A)’s without considering the fact that the source of share applicationmoney including the share premium were not properly explained by theassessee and it lacked any real profit making business credence? We have heard Mr. Vipul Kundalia, learned senior standing counselalong with Mr. Prithu Dudhoria, learned standing counsel for the appellant andMr. Avra Mazumder, learned standing counsel appearing for the respondentassessee. (c)Whether on the facts and in the circumstances of the case the learnedIncome Tax Appellate Tribunal erred in law in upholding the order ofCIT(A)’s without considering the fact that the source of share applicationmoney including the share premium were not properly explained by theassessee and it lacked any real profit making business credence? We have heard Mr. Vipul Kundalia, learned senior standing counselalong with Mr. Prithu Dudhoria, learned standing counsel for the appellant andMr. Avra Mazumder, learned standing counsel appearing for the respondentassessee. We have carefully gone through the orders passed by the Commissionerof Income Act (Appeals)-7, Kolkata, CIT(A) dated 8[th] September, 2020. From thesaid order it is seen that the source of funds by all the share applicants has beenexamined by the CIT(A) and it has been pointed out that the assessing officer hasnot found any defect or deficiency in the source of funds explained by the shareapplicants through their replies to the statutory notices issued under Section133(6) of the Act. Furthermore, on facts, it has been noted that every shareapplicant in their respective replies to the statutory notices issued under Section133(6) of the Act has furnished copies of their income tax acknowledgementsevidencing filing of income tax returns by each of them, copies of their auditedaccounts including balance-sheets wherein such investments made by each ofthem in the subscription of share capital issued by the assessee are dulyreflected as also copies of their bank statements for the relevant period fromwhich the subscription monies were paid by them respectively and copy of theallotment advice received by them from the assessee in respect of the sharesallotted to them.We find that the CIT(A) has made a thorough factual exercise andexamined the matter and held that the genuinity of the transactions has beenproved apart from the identity and the creditworthiness of the share applicants.The revenue carried the matter in appeal before the learned Tribunal and the learned Tribunal on its part once again did a factual verification and affirmedthe order passed by the CIT. Thus, we find the matter is entirely factual whichhas been decided concurrently in favour of the assessee by the CIT(A) and thelearned Tribunal and, therefore, we find that there is no question of law muchless substantial question of law arising for consideration in this appeal. Accordingly, the appeal fails and is dismissed.Consequently, the application stands closed. (T.S. SIVAGNANAM, J.) (SUPRATIM BHATTACHARYA, J.) sg./bp