MAYURPANKH VINCOM PVT. LTD.,HOWRAH vs. ITO, WARD-13(3), KOLKATA

Shri Avijit Ghosal, ld.AR represented on behalf of the assessee. Shri Abhijit Adhikary, Sr. DR appeared on behalf of the revenue.

We primarily adjudicate the issue for the assessment year 2011-2012 as the issue is common for both the assessment years 2011-2012 & 2012- 2013.

It was submitted by the ld. AR that the primary issue was that the assessee had purchased shares to an extent of Rs.48,72,000/- from M/s Crown Commotrade Pvt. Ltd. Ld. AR drew our attention to page 82 of the paper book which is a ledger account of M/s Crown Commotrade Pvt. Ltd. in the books of assessee, the same reads as follows :-

Ld. AR also drew our attention to page 81 of the paper book, which is a bank account of the assessee maintained in Dhanalakshmi Bank Ltd.

1. 6. It was the submission that M/s Crown Commotrade Pvt. Ltd. had provided the assessee Rs.4,56,97,000/-. The assessee had refunded amount of nearly Rs.4,07,25,000/- and for the balance of Rs.48,72,000/-, had purchased the shares in M/s Crown Commotrade Pvt. Ltd. It was the submission that the said bank account in respect of M/s Dhanalakshmi Bank Ltd. was the account from which the refund of the monies to M/s Dhanalakhsmi Bank Ltd. was made. When the Bench asked regarding the receipt of the money by the assessee, the ld.AR drew our attention to page 66 to 70 of the paper book which are the copies of the assessee’s bank account maintained with Bank of Maharashtra, the same reads as follows:-

It was the submission that as the transactions with M/s Crown Commotrade Pvt. Ltd. were genuine, the addition made by the AO in respect of the said credit of Rs.4,56,97,000/- is liable to be deleted.

8. Ld. AR also drew our attention to page 83 of the paper book, which is the bill for the purchase of equity shares worth of Rs.48,72,000/- in M/s Crown Commotrade Pvt. Ltd. The copy bill has been issued to M/s Crown Commotrade Pvt. Ltd. is placed at page 83 of the paper book, the same reads as follows :-

In reply, ld. Sr. DR submitted that in the course of assessment summons had been issued to the directors of M/s Crown Commotrade Pvt. Ltd. and no one had appeared. The source of funds from M/s Crown Commotrade Pvt. Ltd. has not been proved. It was the submission that this money was basically the funds of M/s Patra Bastralaya. It was submitted that the investigation report in the case of said M/s Patra Bastralaya showed this transaction. It was the prayer that the addition as made by the AO is liable to be upheld.

At this point, the ld. AR was requested to show as to how the money had travelled from the bank account maintained with Bank of Maharashtra to Dhanalakshmi Bank Ltd. for the purpose of refund. Especially in view of the fact that whenever money have been received, the money have been withdrawn by either Shri Ashoka Kayan or one Shri Abhishek Bose. Substantially, the withdrawals are made by Shri Ashok Kayan. It must be specifically mentioned here that the balance sheet of the assessee has also been perused which has been placed in the paper book at page 36 which reads as follows :-

It would also be worthwhile to mention here that when the assessee was asked to show the details of the shares purchased on behalf of M/s Crown Commotrade Pvt. Ltd., it was submitted that it has not been asked for by the AO. In short, instead of discharging the assessee’s duty of proving the creditors, the assessee is shifting the responsibility of proving the accounts of the assessee to be true and correct on the revenue. The bank account of the assessee maintained with Bank of Maharashtra and M/s Dhanalakshmi Bank Ltd. being available with the AO and the AO having even the balance sheet and profit and loss account of the assessee, surprisingly did not find it in his wisdom even asked for special audit insofar as the entries in the bank account were not reflected in the balance sheet and profit and loss account of the assessee. How these money transferred to Ashok Kayan and Shri Abhishek Bose and such other persons or companies have been accounted in the balance sheet and how the entries are passed and surprisingly not traced nor tracked. The AO has only blindly taken a stand that the assessee has not proved one transaction. When there are multiple transactions sitting in the bank account and in black and white before him. There is substantial failure on the part of the AO to do any proper investigation. The assessee has also totally failed to prove the transactions with M/s Crown Commotrade Pvt. Ltd. The AO talks about layering of funds, however, what has been done by the assessee has not been brought out entirely, only one part of the transactions indulged by the assessee has been looked into, major portions still remained outside the investigation. Even the directions given by this Tribunal in various decisions earlier rendered, such as in the case of M/s Bisakha Sales Pvt. Ltd., order dated 19.09.2014, reported in (2014) 52 taxmann.com 305 (Kolkata-Tribunal) and Star Griha Private Limited, passed in order dated 14.08.2014, surprisingly, he has not been followed nor considered. The ld. AR has sought for setting aside the issues to the file of ld.AO for readjudication. This prayer of the ld. AR is also not liable to be accepted insofar as substantial opportunities have already been granted to the assessee and the assessee has miserably failed to prove these transactions. Admittedly, there are deficiencies in tracking the money trailed by the AO but there is substantial failure on the part of the assessee to prove the credits. The assessee having failed to prove the transactions and the assessee having only given the name, drew attention the purchase of shares on behalf of M/s Crown Commotrade Pvt. Ltd. to an extent of Rs.48,72,000/-, unfortunately, does not give any evidence for the credit entry of Rs.4,56,97,000/-. A perusal of the bill issued by the assessee to M/s Crown Commotrade Pvt. Ltd. also does not show from where the shares have been purchased or from whom, or whether the assessee is acting as an agent, no details as to how the purchase cost has been paid, has been shown. In fact, there is no entry in the bank accounts nor has it been shown as to how the payments have been made for the purchase of these shares. Even the ledger account shows only investment. Voucher numbers are there and the connected vouchers have also not been produced. In short, no evidence whatsoever credible has been produced to substantiate the assessee’s claim of the receipt of Rs.4,56,97,000/- from M/s Crown Commotrade Pvt. Ltd., thus, the identity, creditworthiness and much less, the genuineness of the transaction with M/s Crown Commotrade Pvt. Ltd. having proved. This being so, we are of the view that the addition as made by the AO and as confirmed by the ld.CIT(A) is liable to be upheld and we do so. Consequently, the appeal of the assessee for A.Y.2011-2012 in is dismissed.

For the assessment year 2012-2013, the addition is in respect of amount of Rs.80 lakhs and for the same findings as for the assessment year 2011-2012, the order of the AO and that of the ld. CIT(A) stands upheld. Thus, the appeal of the assessee for A.Y.2012-2013 in is also dismissed.