JANHAVI PROMOTERS PVT. LTD. ,KOLKATA vs. DCIT-6(1), KOLKATA. , KOLKATA

आयकर अपीलीय अधिकरण कोलकाता 'एसएमसी' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘SMC’ BENCH, KOLKATA डॉ. मनीष बोरड, लेखा सदस्य एवं श्री अधनकेश बनर्जी, न्याधयक सदस्य के समक्ष Before DR. MANISH BORAD, ACCOUNTANT MEMBER & SRI ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No.: 1260/KOL/2023 Assessment Year: 2011-12 Janhavi Promoters Pvt. Ltd.………….........................................Appellant [PAN: AABCJ 8764 G] Vs. DCIT-6(1), Kolkata................................................................Respondent Appearances: Assessee represented by: Sh. Giridhar Dhelia, Adv. Department represented by: Sh. L.N. Dash, Addl. CIT(D/R). Date of concluding the hearing : January 25th, 2024 Date of pronouncing the order : January 30th, 2024 ORDER Per Anikesh Banerjee, Judicial Member: The instant appeal of the assessee was filed against the order of Ld. Commissioner of Income-tax (appeals)-NFAC, Delhi [in brevity ld. ‘CIT(A)’] dated 21.08.2023 passed u/s 250 of the Income Tax Act, 1961 (in brevity the ‘Act’) for assessment year 2011-12. The impugned order was emanated from the order of the ld. Deputy Commissioner of Income Tax, Circle-6(1), Kolkata (in brevity the ‘AO’) passed u/s 147/251/143(3) of the Act dated 31.12.2018. 2. The assessee has taken the following grounds of appeal:

I.T.A. No.: 1260/KOL/2023 Assessment Year: 2011-12 Janhavi Promoters Pvt. Ltd. “1. That order of the Ld. Commissioner of Income Tax (Appeals) is bad in law as facts of the case. 2. That the Ld. CIT (Appeal) erred in upholding the addition u/s 68 involving proviso to section 68 inserted w.e.f. A.Y.2013-14 to A.Y.2011-12. 3. That the Ld. CIT (Appeal) erred in upholding addition of Rs. 15 lakhs u/s 68 which was duly confirmed and accepted by the loan creditors. 4. That the Ld. CIT (Appeal) erred in upholding A.O.’s action of not sending the 131 notice over mail id of the Loan Creditors in spite of specific request of the assessee. 5. That the appellant craves to add or alter any grounds of appeal during the proceedings of appeal.” 3. The assessee filed the appeal before the ITAT with the delay of 35 days. The condonation petition was filed. The delay is explained. The ld. DR did not make any objection in relation to condonation of delay. The delay of 35 days is condoned and the appeal is taken for adjudication. 4. The brief fact of the case is that the assessee received the entry dated 18-03-2011 amount to ₹15,00,000 from M/s. Finlink Suppliers Private Ltd. The assessment was reopened under section 147 of the act. The inquiry was conducted by the ld. AO. The documents were asked to verify the genuinity, credentiality of the party from whom the assessee receive the entry amount to Rs. 15,00,000 during the impugned assessment dear. On dated 27-12- 2018 the party submitted the relevant documents with financial statements to prove the identity, genuinity of the transaction. The ld. AO had initiated further enquiry by issuing notice u/s 131 about them source off the investment of the said party. But it is failed to do so by the party. The addition was confirmed U/s 68 after addition of 15,00,000 with the total income of the assessee. The aggrieved assessee filed an appeal before ld. CIT(A). But the ld. CIT(A) has passed and export the order after considering the fact and ground of the assessee. The assessment order was upheld. The grievance of the assessee is that related to impugned assessment year the ld. AO had initiated the investigation beyond the jurisdiction by asking source of the source which

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I.T.A. No.: 1260/KOL/2023 Assessment Year: 2011-12 Janhavi Promoters Pvt. Ltd. is contradiction the Sec 68 for AY 11-12. The aggrieved assessee filed an appeal before us. 5. The ld. Counsel for assessee (in short AR) argued and taken the legal ground first. The ld. AR placed that all the documentary evidences were filed by the party related to the transaction amount of Rs. 15,00,000/- before the ld. AO during assessment proceeding. The ld. AR invited our attention in relevant paragraph of assessment order page 4 which is reproduced as below: “On 27.12.2018 a reply has been received from Stream Suppliers Private Ltd. (formerly Finelink Suppliers Pvt Ltd.) with which two pages of bank statement and copies of Balance Sheet, P/L A/c etc. has been attached. The requisition u/s 131 was given for production of bills and vouchers, agreements, deeds, rent receipt, rent agreements, electricity bill etc. to examine whether the company really conducted its physical business activity or is it just an entity on papers, filing all statutory reports and returns ritually. I am to state that neither the assessee nor the entity from whom the amount of Rs. 15,00,000/- has been by the assessee can discharge the onus of credit worthiness as well as genuineness of transaction in this case. In view of the above discussion, recorded reason and information from investigation wing as well as submission made by the assessee I am compelled to conclude that in this case assessee has not adduced sufficient evidence to establish creditworthiness of the entity as well as genuineness of the transaction. Consequently, the amount of Rs.15,00,000/- is added in the hands of the assessee as unexplained cash credit u/s.68 of the 11 Act. Penalty proceeding u/s.271(1)(c) is initiated separately for furnishing inaccurate particulars of income.” 6. The ld. AR placed that source of source verification was inserted U/s 68 on and from Finance Act, 2012 w.e.f. 01/04/2013. But the impugned assessment year is for AY 2011-12 and the act has no retrospective effect. So, the ld. AR has acted beyond the jurisdiction. The party had fulfilled all the criteria related to transaction of assessee. The ld. AR argued that though the ld. CIT(A) passed the order ex-parte but the appeal order is a speaking order and the grounds are considered in appeal order.

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I.T.A. No.: 1260/KOL/2023 Assessment Year: 2011-12 Janhavi Promoters Pvt. Ltd. 7. The ld. DR vehemently argued and fully relied on the orders of revenue authority. 8. We heard the rival submission and considered the documents available on records. However, in the case in hand the material evidence produced by the assessee has been duly examined by Ld. AO and there is no dispute with regard to identity of the parties, the amounts were paid by them through banking channels. They themselves did not receive any amount in cash in the immediate vicinity of the transactions. 8.1. The year 2012 amendment in Section 68 of the Act takes effect from 1st April 2013 and will accordingly apply in relation to the assessment year 2013- 14 and subsequent assessment years. Further, the amendment in Finance Act 2022 in section 68 of the Act takes effect from 1st April 2023 is the illustration of application of ‘Mischief Rule’ in interpretation of statutes. Memorandum explaining the amendment makes it crystal clear that amendment is proposed to remove doubts created by certain judicial rulings about the onus of proof of source of source. The principle may have been there in certain judgments in favor of Revenue, but now once this amendment has specifically made applicable the principles with effect from AY 2013-14, the Bench cannot apply retrospectively. 8.2. Further if this evidence was sufficient to the satisfaction of ld. AO. The onus of the assessee was discharged during assessment and the burden was on ld. AO to have at least brought on record some evidence to show that the parties transacting with assessee were not genuine. The burden when discharged by the assessee by substantial evidence the onus shifted on ld. AO to discredit the same with some evidence, direct or circumstantial, and not just bald assertions on his own belief. The party submitted the documents before the ld. AO in persuasion of the notice. The source of source in investigation is not applicable in AY 2011-12 U/s 68 of the Act. We find that ld. AO is not justified by the addition amount to Rs. 1500,000/- by invoking

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I.T.A. No.: 1260/KOL/2023 Assessment Year: 2011-12 Janhavi Promoters Pvt. Ltd. Section 68 of the Act. Accordingly, we set aside the appeal order and addition amount to Rs. 1500,000/- is quashed. 9. In the result, the appeal filed by the assessee in ITA No. 1260/KOL/2023 is allowed. Kolkata, the 30th January, 2024. Sd/- Sd/- [Manish Borad] [Anikesh Banerjee] Accountant Member Judicial Member Dated: 30.01.2024 Bidhan (P.S.) Copy of the order forwarded to: 1. Janhavi Promoters Pvt. Ltd., 11, Clive Row, Kolkata-700 001. 2. DCIT-6(1), Kolkata. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. //True copy // By order

Assistant Registrar ITAT, Kolkata Benches Kolkata

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