9911796707
TMI Blog2021 (2) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... explained cash credits u/s. 68 of the Act including disallowance of interest of Rs. 44,65,805/- on these cash credits, u/s. 68 of the Act. Aggrieved, the assessee carried the matter in appeal without success. 3. Further aggrieved, the assessee is in appeal before us on the following grounds:- "1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in treating unsecured loans of Rs. 5,40,00,000/- as bogus. 2. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs. 5,40,00,000/- on account of unsecured loans by invoking the provisions of section 68 of the Income Tax Act, 1961. 3. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the disallowance of Rs. 44,65,805/- on account of interest on unsecured loans by treating the loans as bogus. 4. The appellant craves leave to add/or amend any grounds of this appeal." 4. The assessee filed the following additional grounds of appeal:- "1. For that the assessing officer issuing the notice u/s. 143(2) of the IT Act 1961 did not have jurisdiction over the case of the assessee hence the said and the consequential as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he transaction is proved before the Assessing Officer, he referred to the following documents filed:- a] Certificate of incorporation b] Income tax return filed for the Assessment Year 2013-14 c] Audited statement of accounts for the Assessment Year 2013-14 d] Tax audit reports of each of these loan creditors. e] Copy of bank statements to prove that the loan is given through banking channels f] Confirmation of loans from the creditor and evidence of repayment wherever applicable. 7.1. He submits that on the face of such voluminous evidence filed in support of each of the loan creditors, the Assessing Officer has no evidence whatsoever to support his conclusion that these are unexplained cash credits. He further submitted that notice u/s. 133(6) of the Act, was issued by the Assessing Officer to various loan creditors and that these notices were duly served and replies were also directly received in his office. The Ld. Counsel for the assessee submits that the addition is bad in law. He relied on a number of case-law for this proposition and filed a paper book running into 1013 pages containing copies of all the documents filed by the lower authorities. 8. The Ld. D/R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as under:- "5. After hearing rival contentions, I admit this additional ground as it is a legal ground, raising a jurisdictional issue and does not require any investigation into the facts. The Ld. Counsel for the assessee submitted that as per Board Instruction No. 1/2011 [F. No. 187/12/2010-IT(A-I)], dt. 31/01/2011, the jurisdiction of the assessee is with the Assistant Commissioner of Income Tax, Circle-1, Durgapur, as the assessee is a non-corporate assessee and the income returned is above Rs. 15,00,000/- and whereas, the statutory notice u/s. 143(2) of the Act, was issued on 29/09/2016, by the Income Tax Officer, ward-1(1), Durgapur, who had no jurisdiction of the case. He submitted that the assessment order was passed by the ACIT, Circle-1(1), Durgapur, who had the jurisdiction over the assessee, but he had not issued the notice u/s. 143(2) of the Act, within the statutory period prescribed under the Act. Thus, he submits that the assessment is bad in law. 5.1. On merits, he rebutted the findings of the lower authorities. The Ld. Counsel for the assessee relied on certain case-law, which I would be referring to as and when necessary. 6. The Ld. D/R, on the other hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e returned income is more than Rs. 15 lacs the case was transferred from the ITO, Ward-1, Haldia to ACIT, Circle-27 and the same was received by the office of the ACIT, Circle-27, Haldia on 24.09.2014 and immediately ACIT issued notice u/s. 142(1) of the Act on the same day. From the aforesaid facts the following facts emerged: i) The assessee had filed return of income declaring Rs. 50,28,040/-. The ITO issued notice under section 143(2) of the Act on 06.09.2013. ii) The ITO, Ward-1, Haldia taking note that the income returned was above Rs. 15 lacs transferred the case to ACIT, Circle-27, Haldia on 24.09.2014. iii) On 24.09.2014 statutory notices for scrutiny were issued by ACIT, Circle-27, Haldia. 6. We note that the CBDT Instruction is dated 31.01.2011 and the assessee has filed the return of income on 29.03.2013 declaring total income of Rs. 50,28,040/-. As per the CBDT Instruction the monetary limits in respect to an assessee who is an individual which falls under the category of 'non corporate returns' the ITO's increased monetary limit was upto Rs. 15 lacs; and if the returned income is above Rs. 15 lacs it was the AC/DC So, since the returned income by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invalid and consequently assessment framed by Income-tax Officers becomes void since issue of notice under section 143(2) was not done by Income-tax Officers as specified in CBDT instruction No. 1/2011." 9.2. The Hon'ble High Court of Calcutta in the case of West Bengal State Electricity Board vs. Deputy Commissioner of Income Tax, Special Range - I, reported in [2005] 278 ITR 218 (Cal.) has held as follows:- "Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Powers of - Assessment years 1983-84 to 1987-88 - Whether a question of law arising out of facts found by authorities and which went to root of jurisdiction can be raised for first time before Tribunal - Held, yes Whether jurisdiction of Assessing Authority is not dependent on date of accrual of cause of action but on date when it is initiated - Held, yes - Whether once a particular jurisdiction is created, same must be prospective and cannot be retrospective and it has to be interpreted having regard to manner in which it has been sought to be created - Held, yes - Assessee" 9.3. The Hon'ble Supreme Court in the case of CIT vs. Laxman Das Khandelwal [2019] 108 taxmann.com 183 (SC), held as follows:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s null and void. When a notice is issued by an officer having no jurisdiction, Section 292BB of the Act, does not comes into play. Coming to the argument of the Ld. D/R that objection u/s. 124(3) of the Act has to be taken by the assessee on rectifying notice u/s. 143(2) of the Act from a non-jurisdictional assessing officer, I am of the view that I need not adjudicate this issue, as I have held that non-issual of statutory notice/s 143(2) of the Act by the jurisdictional Assessing Officer makes the assessment bad in law. Under these circumstances, we allow this appeal of the assessee." 11. Respectfully following the same, we have to hold that the assessment order passed by the DCIT, Circle-11(1), Kolkata, without issuance of notice u/s. 143(2) of the Act, is bad in law. If it is held that the ITO Ward-3(3), Kolkata, has jurisdiction over the assessee, then the assessment order passed by the DCIT, Circle-11(1), Kolkata, would become bad in law as it would be an order passed by an officer who has no jurisdiction. Looking at it either way, we find that the assessment is bad in law. 12. Coming to the merits of the case, we find that the assessee has filed all the necessary documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the said loan including interest was repaid on 05/01/2016. Copy of Confirmation of Account reflecting therein nil balance to be payable by us is enclosed herewith along with the Written Submission. The copy of the Confirmation of Account, TDS, Audited Accounts, IT Return and other documents are available in the Paper Book-2. The details of source of funds from which this company had made the loan are also available in the paper book. All the relevant documents for this company are available on pages 361-378 of the Paper Book-2. Certified Copy of their reply u/s. 133(6) of the Income Tax Act, 1961 filed before the Ld. AO is available on page No. 300-301 of the Paper Book-1. 3) M/s. Baba Metalics Private Limited: There was a opening balance of 22,16,000/- including interest which was received by the assessee company in the previous year and a further loan of Rs. 10,00,000/- was paid to the assessee company, which was received during the financial year 2012-2013 on 23/04/2012. The loan was made by account payee cheque/RTGS. This company was incorporated on 20/09/1995 and was having company identification number U26939WB1995PTC074383. This company duly filed its return of income b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000/- to the assessee company, which was received during the financial year 2012-2013 on 25/05/2012. The loan was made by account payee cheque/RTGS. This company was incorporated on 06/08/2007 and was having company identification number U70101WB2007PTC117656. This company duly filed its return of income before ITO Ward 5(3), Kolkata and was having PAN AADCB1940J. This company was having a paid up capital with free reserves and surplus of Rs. 5,10,11,242/- as on 31/03/2013 and Rs. 5,00,31,390/- as on 31/03/2012 respectively. The said loan including interest was repaid on 21/08/2012 & 25/02/2013. The copy of the Ledger account, TDS, Audited Accounts, IT Return and other documents are available in the Paper Book-2. The details of source of funds from which this company had made the loan are also available in the paper book. All the relevant documents for this company are available on pages 419-434 of the Paper Book-2. Certified Copy of their reply u/s. 133(6) of the Income Tax Act, 1961 filed before the Ld. AO is available on page No. 308 of the Paper Book-1. 6) M/s. Chokhani Realtors Private Limited: This Company had given a loan Rs. 25,00,000/- to the assessee company, which wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s made by account payee cheque/RTGS. This company was incorporated on 18/08/1984 and was having company identification number U27109WB1984PTC. This company duly filed its return of income before DCIT-Central Circle-4(XIX)/CAL, Kolkata and was having PAN AAACG9775F. This company was having a paid up capital with free reserves and surplus of Rs. 54,86,02,090/- as on 31/03/2013 and Rs. 52,32,00,539/- as on 31/03/2012 respectively. The said loan including interest was repaid on 10/07/2012. The copy of the Confirmation of Account, TDS, Audited Accounts, IT Return and other documents are available in the Paper Book-2. The details of source of funds from which this company had made the loan are also available in the paper book. All the relevant documents for this company are available on pages 478-498 of the Paper Book-2. 9) M/s. Imperial Retails Private Limited: This Company had given a loan Rs. 15,00,000/- to the assessee company, which was received during the financial year 2012-2013 on 30/08/2012. The loan was made by account payee cheque/RTGS. This company was incorporated on 04/05/2011 and was having company identification number U52190WB2011PTC162273. This company duly filed its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able on page No. 312-313 of the Paper Book-1. 11) M/s. Jit Finance Private Limited: This Company had given a loan Rs. 10,00,000/- to the assessee company, which was received during the financial year 2012-2013 on 15/06/2012. The loan was made by account payee cheque/RTGS. This company was incorporated on 04/01/1995 and was having company identification number U65921WB1995PTC. This company duly filed its return of income before ITO Ward 1(4), Kolkata and was having PAN AAACJ6647H. This company was having a paid up capital with free reserves and surplus of Rs. 77,29,73,647/- as on 31/03/2013 and Rs. 77,29,33,828/- as on 31/03/2012 respectively. At the end of the year there was a closing balance of Rs. 10,85,808/- to be payable by the assessee company to above party and the said loan including interest was repaid on 25/02/2016. The copy of the Confirmation of account, TDS, Audited Accounts, IT Return and other documents are available in the Paper Book-2. The details of source of funds from which this company had made the loan are also available in the paper book. All the relevant documents for this company are available on pages 533-556 of the Paper Book-2. Certified Copy of their r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y are available on pages 587-611 of the Paper Book-2. 14) M/s. Lakshmiraman Investment & Finance Limited: This Company had given a loan Rs. 50,00,000/- to the assessee company, which was received during the financial year 2012-2013 on 10/07/2012. The loan was made by account payee cheque/RTGS. This company was incorporated on 30/05/2007 and was having company identification number U65900WB2007PTC116238. This company duly filed its return of income before ITO Ward 1(2), Kolkata and was having PAN AABCL3182E. This company was having a paid up capital with free reserves and surplus of Rs. 11,39,27,224/- as on 31/03/2013 and Rs. 11,26,44,526/- as on 31/03/2012 respectively. At the end of the year there was a closing balance of Rs. 50,00,000/- to be payable by the assessee company to above party and the said loan including interest was repaid on 05/03/2014. Copy of Ledger Account reflecting therein nil balance to be payable by us is enclosed herewith along with the Written Submission. The copy of the Ledger Account, TDS, Audited Accounts, IT Return and other documents are available in the Paper Book-2. The details of source of funds from which this company had made the loan are also a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited Accounts, IT Return and other documents are available in the Paper Book-2. The details of source of funds from which this company had made the loan are also available in the paper book. All the relevant documents for this company are available on pages 657-674 of the Paper Book-2. 17) M/s. Monolithic Investments Private Limited: This Company had given a loan Rs. 5,00,000/- to the assessee company, which was received during the financial year 2012-2013 on 18/06/2012. The loan was made by account payee cheque/RTGS. This company was incorporated on 20/11/1995 and was having company identification number U74899WB1995PTC073990. This company duly filed its return of income before ITO Ward 4(4), Kolkata and was having PAN AABCM4179J. This company was having a paid up capital with free reserves and surplus of Rs. 25,71,642/- as on 31/03/2013 and Rs. 25,38,114/- as on 31/03/2012 respectively. The said loan including interest was repaid on 17/11/2012. The copy of the confirmation of account, TDS, Audited Accounts, IT Return and other documents are available in the Paper Book-2. The details of source of funds from which this company had made the loan are also available in the paper boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other documents are available in the Paper Book-2. The details of source of funds from which this company had made the loan are also available in the paper book. All the relevant documents for this company are available on pages 709-732 of the Paper Book-2. Certified Copy of their reply u/s. 133(6) of the Income Tax Act, 1961 filed before the Ld. AO is available on page No. 322-323 of the Paper Book-1. 20) M/s. Pansari Organochem Private Limited: This Company had given a loan Rs. 25,00,000/- to the assessee company, which was received during the financial year 2012-2013 on 17/08/2012. The loan was made by account payee cheque/RTGS. This company was incorporated on 02/01/1996 and was having company identification number U51909WB1996PTC076305. This company duly filed its return of income before DCIT-Central Circle-5(XXV)/CAL, Kolkata and was having PAN AADCP5132A. This company was having a paid up capital with free reserves and surplus of Rs. 3,09,80,716/- as on 31/03/2013 and Rs. 3,00,79,679/- as on 31/03/2012 respectively. The said loan including interest was repaid on 19/11/2012. The copy of the Confirmation of Account, TDS, Audited Accounts, IT Return and other documents are a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 31/03/2012 respectively. At the end of the year there was a closing balance of Rs. 21,93,513/- to be payable by the assessee company to above party and the said loan including interest was repaid on 25/02/2016. Copy of Confirmation of Account reflecting therein nil balance to be payable by us is enclosed herewith along with the Written Submission. The copy of the Confirmation of Account, TDS, Audited Accounts, IT Return and other documents are available in the Paper Book-2. The details of source of funds from which this company had made the loan are also available in the paper book. All the relevant documents for this company are available on pages 773-793 of the Paper Book-2. Certified Copy of their reply u/s. 133(6) of the Income Tax Act, 1961 filed before the Ld. AO is available on page No. 329-330 of the Paper Book-1. 23) M/s. Redlily Enterprises Private Limited: This Company had given a loan Rs. 10,00,000/- to the assessee company, which was received during the financial year 2012-2013 on 02/08/2012. The loan was made by account payee cheque/RTGS. This company was incorporated on 03/09/1991 and was having company identification number U51109WB1991PTC052929. This company d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02/08/2012. The loan was made by account payee cheque/RTGS. This company was incorporated on 01/02/1996 and was having company identification number U51909WB1996PTC076969. This company duly filed its return of income before DCIT Central Circle-3(XIII)/KOL, Kolkata and was having PAN AADCS7657R. This company was having a paid up capital with free reserves and surplus of Rs. 3,27,87,893/- as on 31/03/2013 and Rs. 3,27,53,716/- as on 31/03/2012 respectively. At the end of the year there was a closing balance of Rs. 15,39,946/- to be payable by the assessee company to above party and the said loan including interest was repaid on 15/11/2014. Copy of Ledger Account reflecting therein nil balance to be payable by us is enclosed herewith along with the Written Submission. The copy of the Ledger account, TDS, Audited Accounts, IT Return and other documents are available in the Paper Book-2. The details of source of funds from which this company had made the loan are also available in the paper book. All the relevant documents for this company are available on pages 863-879 of the Paper Book-2. Certified Copy of their reply u/s. 133(6) of the Income Tax Act, 1961 filed before the Ld. AO is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Company had given a loan Rs. 25,00,000/- to the assessee company, which was received during the financial year 2012-2013 on 03/04/2012. The loan was made by account payee cheque/RTGS. This company was incorporated on 20/03/2006 and was having company identification number U74140WB2006PTC108607. This company duly filed its return of income before ITO Ward 1(4), Kolkata and was having PAN AAJCS7441R. This company was having a paid up capital with free reserves and surplus of Rs. 1,44,14,972/- as on 31/03/2013 and Rs. 1,43,68,969/- as on 31/03/2012 respectively. The said loan including interest was repaid on 08/01/2013. The copy of the Ledger Account, TDS, Audited Accounts, IT Return and other documents are available in the Paper Book-2. The details of source of funds from which this company had made the loan are also available in the paper book. All the relevant documents for this company are available on pages 918-938 of the Paper Book-2. Certified Copy of their reply u/s. 133(6) of the Income Tax Act, 1961 filed before the Ld. AO is available on page No. 336-337 of the Paper Book-1. 29) M/s. Vaishali Films Private Limited: This Company had given a loan Rs. 20,00,000/- to the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The loan was made by account payee cheque/RTGS. This company was incorporated on 09/03/2009 and was having company identification number U51909WB2009PTC133608. This company duly filed its return of income before ITO Ward 5(1), Kolkata and was having PAN AACCV9560B. This company was having a paid up capital with free reserves and surplus of Rs. 2,03,53,027/- as on 31/03/2013 and Rs. 2,03,08,435/- as on 31/03/2012 respectively. The said loan including interest was repaid on 04/12/2012. The copy of the Confirmation of account, TDS, Audited Accounts, IT Return and other documents are available in the Paper Book-2. The details of source of funds from which this company had made the loan are also available in the paper book. All the relevant documents for this company are available on pages 981-999 of the Paper Book-2. 32) M/s. Wizard Investment Advisory Private Limited: This Company had given a loan Rs. 15,00,000/- to the assessee company, which was received during the financial year 2012-2013 on 07/11/2012. The loan was made by account payee cheque/RTGS. This company was incorporated on 25/03/2009 and was having company identification number U65990WB2009PTC124230. This company duly f ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
