Principal Commissioner Of Incometax, Central-1, Kolkata v. M/S. Anmol Stainless Pvt. Ltd

OD-27 ITAT/98/2021IA No.GA/2/2021 IN THE HIGH COURT AT CALCUTTASpecial Jurisdiction (Income Tax)ORIGINAL SIDE PRINCIPAL COMMISSIONER OF INCOMETAX, CENTRAL-1, KOLKATA -Versus- M/S. ANMOL STAINLESS PVT. LTD. Appearance: Ms. Sucharita Biswas, Adv.Mr. Soumen Bhattacharyya, Adv....for the appellant. Mr. Avratosh Majumdar, Sr. Adv.Mr. V. Tibrewal, Adv.,Mr. Abhra Majumdar, Adv....for the respondent. BEFORE: The Hon’ble JUSTICE T.S. SIVAGNANAM The Hon’ble JUSTICE HIRANMAY BHATTACHARYYA The Court : This appeal filed by the revenue underSection 260A of the Income Tax Act, 1961 (the ‘Act’ in brevity) isdirected against the order dated 19[th] July, 2019 passed by theIncome Tax Appellate Tribunal, “B” Bench, Kolkata (the ‘Tribunal’in short) in ITA No.1862/Kol/2017 for the assessment year 2012-13.The revenue has raised the following substantialquestions of law for consideration: (i) (ii) Whether the Learned Tribunal erred in ignoring thatexplanation offered by the assessee in respect ofshare capital/share application money and premiumwas not satisfactory as per Section 68 of the saidAct to the extent of the genuineness oftransaction, credit worthiness of the company,nature and source of such sum so credited to theassessee’s account ?Whether Learned Tribunal erred in confirming theorder of Ld. CIT(A), Kol in which Ld. CIT(A), Kolallowed the appeal of the assessee withoutremanding the issue, guided the AO to verify thecredentials of the persons, which tantamounts tosetting aside the case, but the same is not legallypermissible ? We have heard Ms. Sucharita Biswas learned counselassisted by Mr. Soumen Bhattacharyya, learned Advocate for theappellant/revenue and Mr. Avratosh Majumdar, learned seniorcounsel assisted by Mr. V. Tibrewal and Mr. Abhra Majumdar,learned Advocates for the respondent/assessee. The revenue is before us by way of this appeal contendingthat the Commissioner of Income Tax (Appeals)-20, Kolkata (inshort CIT(A)), thereby reversing the order passed by the assessingofficer dated 23[rd] March, 2015 by which the entire amount receivedduring the year under consideration which includes share capitaland premium was added as unexplained credit in the income of theassessee invoking Section 68 of the Act. The order passed by the CIT(A) allowing the assessee’s appeal has been affirmed by thetribunal by the impugned order. The assessing officer whilecompleting the assessment by order dated 23[rd] March, 2015 underSection 144/143(3) of the Act, came to the conclusion that theshare subscriptions were collected as part of pre-meditated planconceived and executed with connivance or involvement of theassessee company. The assessee challenged the said order beforethe tribunal on several grounds. Firstly, on the ground that theassessment order could not have been passed both under Section 144and 143(3) of the Act. The CIT(A) on examining the facts foundthat the assessee had complied with the notice issued by theassessing officer and also filed written submission and,therefore, the assessment order could have been passed only underSection 143(3) of the Act.The next aspect which was examined by the CIT(A) waswhether the assessee was able to establish the identity or creditworthiness of the share-holders which according to the assessingofficer was not established. After taking note of the submissionmade by the assessee, more particularly that the investments havebeen made by the assessee’s own sister concern and groupcompanies, the CIT(A) directed the assessing officer to verify theclaim of the assessee that the investments have been made from theassessee’s own sister concern/group companies having mostly commondirectors and, to treat the appeal filed by the assessee to be allowed on those grounds in case the aforesaid claim is foundcorrect.We find from the order passed by the tribunal that theassessing officer has complied with the direction issued by theCIT(A) and has given effect to the order and no adverse findinghas been recorded by the assessing officer and accordingly theaddition was deleted. Therefore, the tribunal would have beenwell justified in rejecting the revenue’s appeal which was filedagainst the order passed by the CIT(A). Nevertheless the tribunaltook upon itself the exercise to examine the factual positionprobably realising that they are the last fact finding authorityin the hierarchy of authorities provided under the Act. Aftermaking an elaborate factual exercise the tribunal examined thecredit worthiness of the investors and found that three shareapplicants were income tax assessees; they were filing return ofincome; share application form and allotment letter were availableon record; the share application money was paid by the accountpayee cheques; details of bank account belonging to the shareapplicants and their bank statements were available; the assessingofficer did not find any amount to be deposited in cash; the shareapplicants have substantial credit worthiness; the shareapplicants have common directors; all the directors are income taxassessees and all the three share applicants are sister concern.Thus, the tribunal was satisfied that the credit worthiness and the genuinity of the investments have been sufficientlyestablished by the assessee not only before the CIT(A), but alsobefore the assessing officer on the matter being sent back to theassessing officer pursuant to the order passed by the CIT(A). Thus, we find that there is no question of law much lesssubstantial question of law arising for consideration in thisappeal. Accordingly, the appeal is dismissed. Consequently, the connected application for stay (IANo.GA/2/2021) also stands closed. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.) Pkd/A/s.