Principal Commissioner Of Income Tax - 5, Kolkata v. M/S. Modern Malleables Limited

OD – 18 & 19 IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE IA NO: GA/2/2018 (OLD NO: GA/1205/2018)IN ITAT/165/2018 PRINCIPAL COMMISSIONER OF INCOME TAX - 5, KOLKATAVSM/S. MODERN MALLEABLES LIMITED IA NO: GA/1/2018 (OLD NO: GA/1204/2018) INITAT/165/2018PRINCIPAL COMMISSIONER OF INCOME TAX - 5, KOLKATAVSM/S. MODERN MALLEABLES LIMITED BEFORE :THE HON’BLE JUSTICE T.S. SIVAGNANAMA N DTHE HON’BLE JUSTICE HIRANMAY BHATTACHARYYADate: November 22, 2021. Appearance :Ms. Sucharita Biswas, Advocate… for the appellantMr. Mr. Asim Chowdhury, Advocate,… for the respondent The Court : Heard Ms. Sucharita Biswas, learned Counselfor the appellant and Mr. Chowdhury, learned Counsel for therespondent/assessee. We are satisfied with the reasons assigned inthe affidavit filed in support of the prayer for condonation of delay. The delay is condoned. The application for condonation of delaystands allowed. This appeal has been filed by the revenue under Section260A of the Income Tax Act, 1961 (the Act) and is directed against theorder dated 30[th] August, 2017 passed by Income Tax AppellateTribunal “A”Bench, Kolkata in I.T.A. Nos. 908/Kol/2011 and I.T.A.Nos. 1888/Kol/2016 for the assessment years 1996-1997. Therevenue has raised the following substantial question of law forconsideration :- a)Whether on the facts and the circumstances of thecase, the Learned Tribunal was justified in law inallowing deduction of Rs. 1,00,38,000/- on theground that even if any addition is required to bemade on account of unexplained purchase underSection 69C of the Income Tax Act, 1961, the entireexpenditure towards the purchase has to be allowedas a deduction under Section 37(1) of the IncomeTax Act, 1961 which would neutralise the addition ?case, the Learned Tribunal was justified in law inallowing deduction of Rs. 1,00,38,000/- on theground that even if any addition is required to bemade on account of unexplained purchase underSection 69C of the Income Tax Act, 1961, the entireexpenditure towards the purchase has to be allowedas a deduction under Section 37(1) of the IncomeTax Act, 1961 which would neutralise the addition ?b)Whether on the facts and in the circumstances ofthe case, the Learned Tribunal was justified in lawor in fact in cancelling the levy of penalty ofRs.4,31,93,780/- ignoring the 3 member benchdecision of the Supreme Court in K.P.the case, the Learned Tribunal was justified in lawor in fact in cancelling the levy of penalty ofRs.4,31,93,780/- ignoring the 3 member benchdecision of the Supreme Court in K.P. Madhusudhana reported in 281 ITR 81 which hasheld that mistakes in issuing of notice underSection 274 of the Income Tax Act, 1961 cannotvitiate the entire proceedings of levy of Penaltyunder Section 271(1)(c) of the Income Tax Act, 1961and the same view was also held by the Hon’bleCalcutta High Court in Shyamal Baran Mondal –Versus – DCIT reported in (2001) 244 CTR 631which is binding on the Learned Tribunal ? c)Whether on the facts and in the circumstances ofthe case, the Learned Tribunal was justified in lawor in fact in deleting the entire addition ofRs.1,00,38,000/- under Section 69C of the IncomeTax Act, 1961 on account of unexplained purchase,when the source of the purchase of the aboveamount has neither been explained norestablished?the case, the Learned Tribunal was justified in lawor in fact in deleting the entire addition ofRs.1,00,38,000/- under Section 69C of the IncomeTax Act, 1961 on account of unexplained purchase,when the source of the purchase of the aboveamount has neither been explained norestablished? d)Whether the judgment and order passed by theLearned Tribunal is totally perverse for notconsidering the real issue involved in this case ?Learned Tribunal is totally perverse for notconsidering the real issue involved in this case ? We have heard Ms. Sucharita Biswas, learned counsel for theappellant and Mr. Chowdhury, learned Counsel for therespondent/assessee. The respondent/assessee has availed the d)Whether the judgment and order passed by theLearned Tribunal is totally perverse for notconsidering the real issue involved in this case ?Learned Tribunal is totally perverse for notconsidering the real issue involved in this case ? We have heard Ms. Sucharita Biswas, learned counsel for theappellant and Mr. Chowdhury, learned Counsel for therespondent/assessee. The respondent/assessee has availed the benefit of Vivad Se Vishwas Scheme and the appellant/departmenthas issued Form V declared on 1.11.2021. In the light of the samenothing is left for adjudication in this appeal and the appeal standsdisposed of in the light of the settlement arrived at. Consequently,substantial questions of law are left open. Stay application also stands disposed of. (T. S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.) GH/RS.