Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “B” BENCH: KOLKATA
Before: Shri A. T. Varkey, JM & Dr. A. L. Saini, AM]
ORDER
Per Shri A.T.Varkey, JM
This appeal preferred by the revenue is against the order of the Ld. CIT(A), Central- 1, Kolkata dated 31.01.2013 for AY 2008-09.
At the outset itself, the Ld. DR pointed out that in the grounds of appeal
, it is wrongly mentioned that the AO has made the addition as protective assessment only. However, it was pointed out that the AO had made the addition on substantive basis. The main grievance of the revenue is against the action of Ld. CIT(A) in deleting the addition of Rs. 1 cr.
3. Brief facts of the case are that the AO noted that the assessee company’s director Shri Sharma submitted on oath on 15.12.2006 before the DDIT (Inv.), Kolkata that he has got cash equivalent amount from the companies against which the cheques have been issued by the assessee company to various Mumbai based companies of Ketan Parekh Group. Thereafter, the AO notes that since the Director received cash equivalent amount on behalf of the assessee company he was pleased to add on estimate basis the assessee’s income as Rs. 1 cr. taking note that Shri Sharma has deposited huge amount in his proprietary concern 2 Yulan Marketing Pvt. Ltd., AY 2008-09 in the year under consideration. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A) who was pleased to delete the addition. Aggrieved, the revenue is before us.
We have heard rival submissions and gone through the facts and circumstances of the case. We note that the AO has made the addition only on the basis that the Director of the assessee company Shri Pramod Sharma on 15.12.2006 has stated before the DDIT (Inv.) that in lieu of cash, the assessee company had issued cheques to various Bombay based companies of Ketan Parekh group. Even though the AO notes that the said Shri Sharma had retracted his statement by a sworn affidavit before the Notary Public, still the AO taking note that there was huge amounts deposited in Mr. Sharma’s eight proprietorship concern in the year under consideration, the AO estimated the income of the assessee company to the tune of Rs. 1 cr. On appeal, we note that the Ld. CIT(A) has rightly taken note of the fact that deposit of amounts in the director’s proprietary concern cannot be treated as the income of the assessee company. It has to be kept in mind that the assessee Company is a separate legal entity; and even if one of the directors of the assessee company, ie, Mr. Sharma’s proprietorship accepts cash deposits cannot by any stretch of imagination be considered as the income of the assessee company without any material/evidence to show that assessee companies income are deposited in those Firms. Further, the AO has not even cared to mention the amount deposited in cash in the eight proprietary concerns of Mr. Sharma from the assessee Company, without which it is not understood as to how the AO estimated the income of assessee company at Rs 1 crore. So, the assessment order has been framed and income assessed by AO without application of mind and is vague and is bad in law and perverse and, therefore, cannot stand the scrutiny of law, therefore, the Ld. CIT(A) has rightly deleted the addition which requires no interference from our part and, therefore, we confirm the order of the Ld. CIT(A) and dismiss the appeal of Revenue.
In the result, appeal of revenue is dismissed. Order is pronounced in the open court on 17th May, 2019. Sd/- Sd/- (Dr. A. L. Saini) (A. T. Varkey) Accountant Member Judicial Member Dated: 17th May, 2019 Jd.(Sr.P.S.)
Copy of the order forwarded to:
1 Appellant – DCIT, Central Circle-VII, Kolkata. 2 Respondent – M/s. Yulan Marketing Pvt. Ltd., 205, Rabindra Sarani, Kolkata-700 007. 3 CIT(A), Central -1, Kolkata (Sent through e-mail)