Principal Commissioner Of Income Tax-2, Kolkata vs Shelter Infra Projects Ltd.

Sudip Deb, J.:-

This is an application for condoning the delay of 393 days in preferring the appeal. The parties have filed their respective affidavits.

After going through the averments made in the petition, we find sufficient grounds have been made out for condoning the delay and accordingly, the delay is condoned.

GA 1 of 2026 stands allowed.

There will be no order as to costs.

This instant appeal has been filed by the revenue assailing the order dated 10^th September, 2024 passed by the Income Tax Appellate Tribunal “B” Bench, Kolkata in ITA No. 421/Kol/2024 relating to the assessment year 2012-2013. G.A. No. 2 of 2026 is an application for stay in connection with ITAT No. 84 of 2026.

The appellant/revenue has raised the substantial questions of law which are stated hereinbelow:-

Though the appellant has raised the above mentioned substantial questions of law but we have not framed any substantial questions of law.

Since from the substantial questions of law as raised by the appellant, it appeared to us these are all pure questions of fact, we have invited the appellant to address us as to whether the substantial questions of law as raised by the appellant are at all substantial questions of law or not.

We have only heard the appellant. The respondent has not been called upon at this stage.

The Learned Counsel for the appellant placed the impugned order and argued that the Learned Tribunal has committed an error in law while deleting the addition of Rs.6,27,00,000/- and Rs.19,13,40,000/- under Section 68 of the Income Tax Act, 1961 on account of accommodation entries as unexplained cash credit despite the respondent/assessee failing to establish the genuineness of the transactions. It is also argued that Tribunal has committed an error in failing to appreciate that the transactions were not genuine and genuineness of the transactions had not been established by the respondent/assessee.

It is also argued that the respondent/assessee could not give cogent evidence despite several opportunities were given to the respondent/assessee.

Before we discuss about the impugned order, it is important to mention the facts of the instant case as this is a second round of litigation between the parties.

The respondent/assessee filed its return of income for the assessment year 2012-2013 on 26^th December, 2012 declaring the total income as nil. Thereafter, the case was selected for scrutiny and the assessment was completed on 16^th March, 2015 by passing the order under Section 143(3) of the Income Tax Act, 1961 which is hereinafter referred to as “the said Act”. By the said order passed under Section 143(3) of the said Act, the income of the respondent/assessee was assessed at Rs.33,00,66,403/-.

Thereafter, the Pr. CIT while exercising the power of revision as contemplated under Section 263 of the said Act revised the assessed income to Rs.33,11,79,425/-.

Being aggrieved by the said order passed in revision, the respondent/assessee preferred an appeal before the CIT (Appeals)-18, Kolkata, whereupon the CIT (Appeals) vide its order dated 16^th September, 2016 upheld the majority of decision made by the Assessing Officer and deleted some additions. The CIT (Appeals) revised the total income to Rs.23,87,07,930/-.

Challenging the said order, the respondent/assessee preferred an appeal before the Income Tax Appellate Tribunal as contemplated under Section 253 of the said Act and after hearing the parties the Income Tax Tribunal remanded back the case to the Assessing Officer for making de novo assessment.

Pursuant thereto, the Assessing Officer heard the matter and invited the respondent/assessee to give cogent evidence in support of its case. It appears from the order of the Assessing Officer that despite giving opportunities, the respondent/assessee did not provide detail information and by an order dated 13^th December, 2019 the Assessing Officer held that the total income of the assessee at Rs.23,98,20,955/- by making the following additions-

The respondent being aggrieved by the said order of the Assessing Officer dated 13^th December, 2019, preferred an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) vide order dated 26^th December, 2023, dismissed the appeal of the respondent/assessee and confirmed the addition made by the Assessing Officer.

In the said order the Commissioner of Income Tax (Appeals) had mentioned that despite giving opportunities, the respondent/assessee did not file detail information.

Challenging the said order of the Commissioner of the Income Tax (Appeals), the respondent/assessee filed an appeal before the Income Tax Appellate Tribunal “B” Bench, Kolkata. The Appellate Tribunal has partly allowed the appeal of the respondent/assessee.

While partly allowing the appeal, the Appellate Tribunal has categorically recorded that respondent/assessee has disclosed additional documents by way of paper book and reference of those documents has been mentioned in the impugned order while partly allowing the appeal as aforesaid.

The Appellate Tribunal has categorically mentioned the revised grounds of appeal formulated by the respondent/assessee in the impugned order which are quoted below:-

The Appellate Tribunal has dealt with the issues and also while allowing the appeal partly, recorded the fact that the records of the respondent/assessee for the relevant assessment year got lost/damaged/soiled but, however, the respondent/assessee retrieved the records which would demonstrate that the payment had been by the assessee.

In the impugned order the Appellate Tribunal deleted the amount of Rs.6,27,00,000/- and Rs.19,13,40,000/-. This apart, the Appellate Tribunal has also deleted a sum of Rs.3,75,799/- and Rs.9,00,246/- in respect of the parties, namely, M/s Bharat Enterprise and M/s Nirman which were initially treated by the Assessing Officer as bogus trading liability.

Relating to deletion of Rs.20,33,817/- in respect of three parties, namely, Kripa Infrastructure, Ram Naresh Singh, Swastik Engineering, the Appellate Tribunal confirmed the addition of Rs.5,06,540/- made in respect of the transactions with Ram Naresh Singh.

Relating to other parties, namely, Kripa Infrastructure and Swastik Engineering are concerned the Appellate Tribunal restricted the addition to 50 per cent of what had been made by the Assessing Officer.

This order of the Appellate Tribunal has been challenged in the instant appeal by the revenue.

We have gone through the impugned order of the Income Tax Appellate Tribunal passed on 10^th September, 2024.

We find while dealing with each and every issue framed before it, the Appellate Tribunal has categorically considered the evidence which were placed before it by the respondent/assessee by filing the paper book. Detailed findings have been given relating to deleting of Rs.6,27,00,000/-and Rs.19,13,40,000/-. It appears from the impugned order that while deleting the aforesaid figures the Appellate Tribunal has categorically examined the evidence produced before it. The copy of the confirmation of the accounts made by M/s Growfast Realtors (P) Ltd. was also considered.

It also appears from the impugned order that Appellate Tribunal after going through the documents produced before it has recorded that respondent/assessee duly proved that the aforesaid amount (Rs.6,27,000/-) represents the payment made by the assessee to the said M/s Growfast Realtors (P) Ltd.

So far as deleting Rs.19,13,40,000/- as unexplained credit from M/s Sarda Vanijya Private Limited, the Appellate Tribunal has considered several documents annexed to the paper book such as details of transaction, certificate of an accountant which is a certificate under first proviso to Sub-Section 1 of Section 201 of the said Act certifying that the aforesaid payment had been made to M/s Sarda Vanijya Private Limited and TDS was also duly deducted.

It is the specific finding of the Appellate Tribunal that considering those documents, it had been duly proved that the respondent/assessee had paid the said amount as business payment to M/s Sarda Vanijya Private Limited.

We also find from the impugned order that the Appellate Tribunal has categorically referred to accounts of trading liabilities from the respective parties for proving the transaction entry by the respondent/assessee relating to the two companies namely, M/s Bharat Enterprise and M/s Nirman. The Tribunal has deleted the addition of Rs.3,75,799/- and Rs.9,00,246/- after considering that the preponderance of probabilities in this respect lies in favour of the respondent/assessee.

We also find that while deleting the said entries the Appellate Tribunal has categorically recorded the fact that the respondent/assessee has been able to produce evidence in respect of remaining parties and also considered the fact that the assessee has collected the records from various parties and it is only after that the aforesaid amounts were ordered to be deleted.

Relating to deletion of Rs.20,33,817/- in respect of Kripa Infrastructure (Rs.4,77,268/-), Ram Naresh Singh (Rs.5,06,540/-) and Swastik Engineering (Rs.10,50,009/-), the Appellate Tribunal has categorically recorded its satisfaction to the extent that respondent/assessee has been able to produce cogent evidence before it. This has also been recorded that agreement with said Ram Naresh Singh has been produced. Confirmation of Ram Naresh Singh has also been produced. This apart, the copy ledger of the respondent/assessee which reflects the books of account of the said Ram Naresh Singh has also been considered.

So far as the addition made relating to other companies, namely, Kripa Infrastructure and Swastik Engineering, the Appellate Tribunal has categorically recorded that most of the transactions with the said companies had been explained by the respondent/assessee. The impugned order categorically records the fact the books of account, bank account which are necessary for deciding this issue had also been produced.

The Appellate Tribunal after considering this has confirmed the addition of Rs.5,06,540/- relating to the transaction made with Ram Naresh Singh but reduced the addition in respect of Kripa Infrastructure and Swastik Engineering to the extent of 50 per cent of the addition made by the Assessing Officer.

We find that the Appellate Tribunal only after considering the evidence and documents submitted before it has allowed appeal of the respondent/assessee partly.

Rule 18(4) of the Income Tax Appellate Tribunal Rules, 1963 categorically permits the party to give additional evidence by filing a separate paper book containing such particulars as are referred in Sub-Rule 3 accompanied by an application stating the reasons for filing such additional evidence.

After going through the impugned order, we find that the respondent/assessee has categorically stated while giving additional evidence before the Appellate Tribunal that the records of the respondent/assessee for the relevant assessment year which was under consideration got lost/damaged/soiled but, however, the respondent/assessee later on retrieved records which were produced before the Assessing Officer. We also find after going through the order of the Assessing Officer which were subsequently affirmed by the Commissioner that nothing had been said on this point by the Assessing Officer. On the contrary, the Assessing Officer had erroneously recorded that nothing had been produced by the respondent/assessee. This apart, the additional evidence which were given before the Tribunal is permissible in law.

Rule 18 Sub-Rule 4 of the Income Tax (Appellate Tribunal) Rules, 1963 permits the respondent/assessee to give additional evidence. Rule 18 Sub-Rule 4 is quoted hereinblow:-

Rule 18(3) contemplates as follows:-

Therefore, there is no illegality in the order of the Tribunal permitting the respondent/assessee to give additional evidence before it. It is only after considering the documents which were produced by way of additional evidence, the Appellate Tribunal came to such finding.

This apart, from the impugned order we also find that Appellate Tribunal has given adequate reasons relating to deleting the entries and only then came to the finding about the correctness and genuineness of the transactions of the respondent/assessee.

The Appellate Tribunal being the last fact finding authority has correctly passed the order after taking into consideration the additional evidence. There is no perversity in the impugned order.

Therefore, we are of the view that issues raised by the revenue in appeal are pure questions of fact and cannot be entertained in the instant appeal. We also hold that no substantial questions of law involved in the instant appeal.

Accordingly, the instant appeal is dismissed.

There will be no order as to costs.

Urgent photostat certified copy of this order, if applied for, be given to the parties upon compliance with the all necessary formalities.