Itat/158/2021 Ia No: Ga/2/2021 Principal Commissioner Of Income Tax(Central)-2, Kolkata v. M/S. R.m. Commercial Pvt. Ltd

IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE ITAT/158/2021IA NO: GA/2/2021PRINCIPAL COMMISSIONER OF INCOME TAX(CENTRAL)-2, KOLKATAVERSUSM/S. R.M. COMMERCIAL PVT. LTD. BEFORE : THE HON’BLE JUSTICE T.S. SIVAGNANAMAndTHE HON’BLE JUSTICE HIRANMAY BHATTACHARYYA Date : 9[th ]February, 2022 Appearance :- Mr. Debasish Chowdhury, Adv.… For AppellantMr. J.P. Khaitan, Sr. Adv.Ms. Swapna Das, Adv.Mr. Siddhartha Das, Adv.… For Respondent The Court : This appeal by the revenue filed under Section260A of the Income Tax Act, 1961 (the Act, for brevity) is directedagainst the order dated 6[th] December, 2019, passed by the IncomeTax Appellate Tribunal, `A’ Bench, Kolkata in ITA Nos. 305 and306/Kol/2018 for the assessment years 2012-13 and 2013-14.Revenue has raised the following substantial questions of law for boththe assessment years. Assesment Year 2012-13 (a)Whether on the facts and circumstances of the case andin law, Learned Income Tax Appellate Tribunal has erredin deleting a sum of Rs.10,65,32,302/- representingalleged unsecured loan received by the assessee?in law, Learned Income Tax Appellate Tribunal has erredin deleting a sum of Rs.10,65,32,302/- representingalleged unsecured loan received by the assessee? (b)Whether on the facts and circumstances of the case andin law, Learned Income Tax Appellate Tribunal has erredin appreciating the fact that the assessee failed to file anydetails or documents with regard to receipt of allegedunsecured loan substantiating creditworthiness andgenuineness of the transaction in assessmentproceedings?in law, Learned Income Tax Appellate Tribunal has erredin appreciating the fact that the assessee failed to file anydetails or documents with regard to receipt of allegedunsecured loan substantiating creditworthiness andgenuineness of the transaction in assessmentproceedings? (c)Whether on the facts and circumstances of the case andin law, Learned Income Tax Appellate Tribunal has erredin deleting the addition of sum of Rs.33,70,549/- u/s 14Aread with rule 8D ignoring the essence of CBDT’s CircularNo.05/2014 dated 11.02.2014?in law, Learned Income Tax Appellate Tribunal has erredin deleting the addition of sum of Rs.33,70,549/- u/s 14Aread with rule 8D ignoring the essence of CBDT’s CircularNo.05/2014 dated 11.02.2014? Assesment Year 2013-14 (i)Whether on the facts and circumstances of the case andin law, Learned Income Tax Appellate Tribunal has erredin deleting a sum of Rs.1,42,95,699/- representing allegedunsecured loan received by the assessee?in law, Learned Income Tax Appellate Tribunal has erredin deleting a sum of Rs.1,42,95,699/- representing allegedunsecured loan received by the assessee? (ii)Whether on the facts and circumstances of the case andin law, Learned Income Tax Appellate Tribunal has erredin law, Learned Income Tax Appellate Tribunal has erred (iii) (iv) in appreciating the fact that the assessee failed to file anydetails or documents with regard to receipt of allegedunsecured loan substantiating creditworthiness andgenuineness of the transaction in assessmentproceedings? Whether on the facts and circumstances of the case andin law, Learned Income Tax Appellate Tribunal has erredin deleting the addition of sum of Rs.16,20,000/- u/s. 68of the Income Tax Act, 1961 on account of sum receivedfrom sale of shares? Whether on the facts and circumstances of the case andin law, Learned Income Tax Appellate Tribunal has erredin deleting the addition of sum of Rs.95,65,382/- u/s.14A read with rule 8D ignoring the essence of CBDT’sCircular No.05/2014 dated 11.02.2014? We have heard Mr. Debasish Chowdhury, learned StandingCounsel, appearing for the appellant/revenue and Mr. J.P. Khaitan,learned Senior Counsel, assisted by Ms. Swapna Das and Mr.Siddhartha Das, learned Counsel for the respondent/assessee. Whether on the facts and circumstances of the case andin law, Learned Income Tax Appellate Tribunal has erredin deleting the addition of sum of Rs.16,20,000/- u/s. 68of the Income Tax Act, 1961 on account of sum receivedfrom sale of shares? Whether on the facts and circumstances of the case andin law, Learned Income Tax Appellate Tribunal has erredin deleting the addition of sum of Rs.95,65,382/- u/s.14A read with rule 8D ignoring the essence of CBDT’sCircular No.05/2014 dated 11.02.2014? We have heard Mr. Debasish Chowdhury, learned StandingCounsel, appearing for the appellant/revenue and Mr. J.P. Khaitan,learned Senior Counsel, assisted by Ms. Swapna Das and Mr.Siddhartha Das, learned Counsel for the respondent/assessee. Two issues fall for consideration in this appeal. Except for theamounts involved, the questions of law raised by the revenue in boththe matters are identical. The first question is with regard to theaddition made under Section 68 of the Act and whether the Commissioner of Income Tax (Appeal) [CIT(A)] and the Tribunal werejustified in deleting the said addition. The second question pertains towhether Section 14A read with Rule 8D could have been invoked bythe Assessing Officer. On the second question, we find on facts thatthe assessee had made a specific claim that there was no exemptincome earned by them during the relevant assessment years. Thisfactual position was not controverted by the Assessing Officer andtherefore the CIT(A) and the Tribunal granted relief to the assessee. We find that there is no error in the finding rendered by theCIT(A) and the Tribunal as they had rightly taken note of the legalposition. Hence, substantial questions of law “(c)” for the assessmentyear 2012-13 and “(iv)” for the assessment year 2013-14 are decidedagainst the revenue. The next question would be with regard to theaddition made under Section 68 of the Act. According to the AssessingOfficer, creditworthiness of the lenders has not been proved. Thisaspect has been examined in an elaborate manner by the CIT(A). Infact, twice remand reports were called for from the Assessing Officer toexamine the documents produced by the assessee. The CIT(A) hasrecorded that the Assessing Officer has not rendered any adversecomment on the documents which have been produced by theassessee. Further, the CIT(A) as well as the Tribunal re-examined thefacts to ascertain as to whether the assessee had established thecreditworthiness of the lenders and on facts findings have beenrecorded that the lender companies are income tax assessees, they are regularly filing income tax returns, the loans were advanced throughaccount payee cheque, details of bank accounts and statements wereavailable. Furthermore, the assessee was also able to demonstrate thesource of money deposited into their bank accounts, which, in turn,has been used by them to lend it to the assessee as loan. Thus, theCIT(A) and the Tribunal, considering the facts of the case, held thatthe assessee has discharged its onus to prove the identity,creditworthiness and genuineness of the lender companies and,thereafter, the onus shifted on the Assessing Officer to disprove thedocuments furnished by the assesssee, which was not done by theAssessing Officer despite the CIT(A) calling for remand report on twooccasions. Thus, we find that the entire matter revolves on facts andthere is no question of law, much less the substantial question of law,arising for consideration in this appeal on this issue. Accordingly, the appeal is dismissed. With the dismissal of the appeal, the application beingGA/2/2021 is also dismissed. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.)