D.C.I.T CC - X,KOLKATA, KOLKATA vs. M/S RAMEL INDUSTRIES LTD, KOLKATA

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ITA 1751/KOL/2013Status: DisposedITAT Kolkata23 January 2019AY 2012-20134 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in accepting the retracted statement without examining its justifiability and the lack of independent verification for the cash repayments. The issue involves mixed questions of fact and law requiring proper adjudication.

What were the facts?

During a search, the assessee's statement under Section 132(4) was recorded. Subsequently, the assessee retracted this statement, claiming cash repayments to depositors. The CIT(A) allowed relief based on this retracted position without proper verification.

What were the issues?

Whether relief can be granted based on a retracted statement without proper verification, and if the CIT(A) applied his mind correctly to the evidence.

Which sections of the Income-tax Act were involved?

Section 132(4),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C”, BENCH KOLKATA

Before: SHRI A.T.VARKEY, JM &DR. A.L.SAINI, AM

For Appellant: Shri P.K. Srihari, CIT DR
Hearing: 19/12/2018Pronounced: 23/01/2019

Per Dr. A. L. Saini:

The captioned appeal filed by the Revenue pertaining to assessment year 2012-13, is directed against an order passed by the learned Commissioner of Income Tax (Appeals), Central-II, Kolkata (in short the ld. CIT(A)] in appeal no. 85/CC-X/CIT(A)C-II/12-13, which in turn arise out of an assessment order passed by the Assessing Officer u/s 143(3) of the Income Tax Act, 1961 ( in short the Act) dated 07.12.2012. 2. The grounds of appeal raised by the revenue are as follows: i) That in the facts and in the circumstances of the case, the ld. CIT(A) has erred in allowing relief for the reason that the assessee could not take a M/s Ramel Industries Ltd. Assessment Year:2012-13 retracted position than what its directors had already declared in the statement recorded u/s 132(4) of the Income Tax Act.

ii) That in the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in holding that no addition can be made on the basis of statement made u/s 132(4) of the Income Tax Act and based his decision on the retracted position taken later on by the assessee that liabilities to the extent of Rs. 9,99,06,260/- were paid during the year out of the liabilities of Rs. 37,08,19,289/-, as admitted in the statement u/s 132(4) of the Income Tax Act.

iii) That in the facts and in the circumstances of the case, the ld. CIT(A) has erred in allowing relief to the tune of Rs. 9,99,06,260/ as repayment in cash by way of refund to the depositors, disregarding the fact that none of such depositors were income tax assessee and did not hold PAN and their transaction with the assessee were conducted in cash and therefore could not be verified from any independent source as such there was no documentary evidences or trial to cross verify the assessee’s transaction with such depositors.

iv) That the Department craves leave to add, modify or alter any of the grounds of appeal and /or adduce additional evidence at the time of hearing of the case.

3.

At the outset ld. DR for the revenue pointed out that despite twelve hearings before this Tribunal none appeared on behalf of the assessee to defend the impugned order passed by the ld CIT(A). It was also brought to our notice that Department has also served the notice to the assessee as per the direction of this Tribunal then also none appeared on behalf of the assessee. The ld. DR also pointed out that issue involved in the present appeal relates to mixed question of facts as well as law therefore, the case may be remitted back to the file of the ld. CIT(A) for fresh adjudication. Since the CIT(A) has passed his impugned order on the basis of statement retracted by the assessee without even bothering to justify the reasons as to why the assessee has retracted his statement recorded u/s 132(4) of the Act; and thus, the ld. CIT(A) did not apply his mind,while passing the impugned order. Therefore, ld DR prayed the Bench that the appeal needs to be do novo adjudicated by the ld CIT(A). M/s Ramel Industries Ltd. Assessment Year:2012-13

4.

We note that in this case during the search and seizure action, a statement of the assessee undersection 132(4) of the Act was recorded and based on thatstatementthe assessment was framed u/s 143(3), making some addition.On appeal,Ld. CIT(A) passed the impugned order accepting the retracted statement without bothering to discuss the justifiability of the assessee’s retracted statement which was recorded U/s 132(4) of the Act. From a perusal of the grounds of appeal raised by the Revenue reveal that the ld CIT(A) has given relief to the assessee without examination of relevant evidence and therefore according to ld CIT- DR, the order passed by the ld CIT(A) is perverse. We are of the view that issue raised by the Revenue contains mixed question of law and facts, which requires the assistance of ld AR/assessee along with paper bookto verify the findings of the ld CIT(A). Since the AR/assessee is not bothered to appear before us therefore, we set aside the order of ld CIT(A) and remand the matter back to the file of ld CIT(A) with the direction to pass denovo order after giving opportunity to assessee and assessing officer.

5.

In the result, the appeal of the Revenue is allowed for statistical purposes.

Order is pronounced in the open court on 23 .01.2019. (A.T.VARKEY) (A.L.SAINI) "या"यकसद"य / JUDICIAL MEMBER लेखासद"य / ACCOUNTANT MEMBER कोलकाता /Kolkata; "दनांक/ Date: 23/01/2019 (SB, Sr.PS)

आदेशक"""त"ल"पअ"े"षत/Copy of the Order forwarded to : 1. अपीलाथ"/The Appellant –DCIT, CC-X, Kolkata

2.

""यथ"/ The Respondent –M/s Ramel Industries Ltd. 3. आयकरआयु"त(अपील) / The CIT(A), 4. आयकरआयु"त/ CIT

5.

"वभागीय""त"न"ध, आयकरअपील"यअ"धकरण, कोलकाता/ DR, ITAT, M/s Ramel Industries Ltd. Assessment Year:2012-13 Kolkata 6. गाड"फाईल / Guard file. स"या"पत""तBy Order

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