I.T.O.,WARD-1(2), KOLKATA vs. M/S LIFEWOOD INFOTECH PVT. LTD., KOLKATA

Per Rajpal Yadav, Vice-President (KZ):- The Revenue is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Appeals)-1, Kolkata dated 16.01.2019 passed for A.Y. 2012-13.

3. Grounds No. 1 & 2 are inter-connected with each other. In these grounds, grievance of the Revenue is that the ld. CIT(Appeals) has erred in deleting the addition of Rs.9,91,00,000/-, which was added by the ld. Assessing Officer with the aid of section 68. We have sent repeated notices to the assessee, but every time the notices returned back. Therefore, we proceed ex-parte qua the assessee.

Assessment Year: 2012-2013 M/s. Lifewood Infotech Pvt. Limited

Assessment Year: 2012-2013 M/s. Lifewood Infotech Pvt. Limited

Assessment Year: 2012-2013 M/s. Lifewood Infotech Pvt. Limited Investment Company –vs.- CIT reported in 206 ITR 718 and the order of ITAT in from pages no. 4 to 11. Apart from this reproduction of these two orders his own devotion to the issue is only in two paragraphs. In Paragraphs no. 2 to 6, he has briefly mentioned the facts about filing of return, issuance of notice under section 143(2) and 142(1), grounds of appeal raised by the assessee and reproduction of section 68 of the Income Tax Act. Thereafter his finding starts from paragraphs no.7 and 13. In between, he has reproduced the judgment of the Hon’ble Calcutta High Court and the order of ITAT. The relevant paragraphs no. 7 & 13 are reproduced hereunder:-

“7. In other words, no amount has been credited to the books of accounts of the assessee for purchase of shares. It was adjusted against investments made. In other words, the share application was separate. Investment which had been made had been adjusted. The share capital was not issued on receipt of any cash. Shares were issued for consideration other than cash in lieu of assessee-company making investment any shares in some other company”.

“13. Therefore, going by the decision of the Hon’ble Tribunal the Calcutta High Court, Madras High Court as well as the facts of the case since there was no infusion of cash for purchase of shares and that sum cannot be held as being credited to the account of the assessee, no addition can be made u/s 68 of the Income Tax Act, 1961. In view of the above, addition made in Grounds of Appeal No. 1 to 3 are deleted”.

It appears that ld. CIT(Appeals) has deleted the addition by observing that the assessee has not received cash on account of share application

Assessment Year: 2012-2013 M/s. Lifewood Infotech Pvt. Limited money, rather it has adjusted these sale of shares against some investments made earlier. It is not specifically discernable what was the investment, which is the investor company when investment was made etc. It is also pertinent to observe that the ld. Assessing Officer was also required to verify the nature of investment, the nature of character of the company, who allowed to have made investment.

Before us, it appears that the assessee-company is a paper company.

Nobody has taken the litigation seriously, i.e. the ld. Assessing Officer as well as ld. CIT(Appeals). The ld. 1st Appellate Authority has erred in adjusting the facts of this case with ratio of law laid down in some other judgement. The impugned orders are not sustainable on account of non-speaking orders. Therefore, we set aside both the orders and restore this issue to the file of ld. Assessing Officer for re- adjudication. The ld. Assessing Officer is directed to collect complete facts and discuss lucidly in the order required to be passed by him after this restoration.

Assessment Year: 2012-2013 M/s. Lifewood Infotech Pvt. Limited (2) M/s. Lifewood Infotech Pvt. Limited, 7/1A, Grant Lane, Kolkata-700012 (3) Commissioner of Income Tax (Appeals)-1, Kolkata;