Income Tax - 2 vs M/S. Gemini Commerce Pvt. Ltd
2023 Latest Caselaw 2031 Cal/2

                                 1




OD - 3

                      IN THE HIGH COURT AT CALCUTTA
                  Special Jurisdiction [Income Tax]
                               ORIGINAL SIDE


                                     ITAT/165/2023
                                     IA NO.GA/1/2023
                                     PRINCIPAL COMMISSIONER OF
                                     INCOME TAX - 2, KOLKATA
                                        -Versus-
                                     M/S. GEMINI COMMERCE PVT. LTD.


BEFORE :
THE HON'BLE CHIEF JUSTICE T.S. SIVAGNANAM
          And
THE HON'BLE JUSTICE HIRANMAY BHATTACHARYYA
Date : 14th August, 2023

                                                           Appearance :
                                                 Ms. Smita Das De, Adv.
                                               Mr.Prithu Dudheria, Adv.
                                                   ..for the appellant.

                                        Mr.Abhratosh Majumdar, Sr. Adv.
                                                 Mr.Avra Mazumder, Adv.
                                            Mr.Soumitra Choudhury, Adv.
                                                  Mr.Kausheyo Roy, Adv.
                                                 ...for the respondent.

The Court : This appeal filed by the revenue under

Section 260A of the Income Tax Act, 1961 (the Act) is directed

against the order dated 15th March, 2023 passed by the Income

Tax Appellate Tribunal, "A" Bench, Kolkata (the Tribunal) in

ITA No.14/Kol/2021 for the Assessment Year 2014-15.

The revenue has raised the following substantial

question of law for consideration :

"Whether on the facts and in the circumstances of the case the Learned Income Tax Appellate Tribunal was justified in law to delete the additions made under Section 68 of the I.T. Act, 1961 in absence of any cogent and for reliable evidence towards establishing the identity and creditworthiness of the loan creditors and genuineness of the loan transactions despite the fact that the respective loan creditors were found to be non-existence Companies?"

We have heard Ms. Smita Das De, learned standing

counsel assisted by Mr. Prithu Dudheria, learned counsel

appearing for the appellant/revenue and Mr. Abhratosh

Majumdar, learned senior counsel assisted by Mr. Avra

Mazumder, learned counsel appearing for the

respondent/assessee.

The assessing officer by an order dated 20th December,

2016 completed the assessment under Section 143(3) for the

assessment year under consideration (A.Y.2014-15). The

assessing officer after issuing the show cause notice to the

assessee disallowed the substantial amount as an unexplained

loan creditors of the assessee. The assessee filed appeal

before the Commissioner of Income Tax (Appeals) - 4, Kolkata

[CIT(A)]. Before the appellate authority the assessee appears

to have filed paper book containing certain details and,

therefore, the CIT(A) called for a remand report and

accordingly the assessing officer submitted the remand report

on 17th September, 2019. On a perusal of the report it is seen

that in respect of each one of the year transaction with the

eighteen companies the assessing officer came to the

conclusion that the their creditworthiness has not been

established and their identity also in certain cases has not

been established. Thus, what was required by the CIT(A) to

examine was the correctness of the information furnished by

the assessee with reference to the remand report which has

been called for. Though at the first blush the order passed by

the CIT(A) appears to be an elaborate order and on a close

scrutiny we find the same to be otherwise this is so because

CIT(A) has extracted the entire judgment of this Court in ITA

No.52 of 2001 in the case of Commissioner of Income Tax,

Central - I, Calcutta Vs. M/s. Nishan Indo Commerce Ltd.

(Calcutta High Court) and after extracting the entire

decision, the finding rendered by the CIT(A) is only in the

last paragraph stating that the assessee has discharged his

onus by providing sufficient documentary evidence to the

assessing officer. We find that there is absolutely no

discrepancy on the documents which were placed by the assessee

as well as the opinion rendered by the assessing officer in

his remand report. When the matter was carried out by the

revenue to the Tribunal, the Tribunal also appears to have

committed the same mistake or rather swayed by the volume of

documents placed before it in the form of a paper book. The

Tribunal would state that the Tribunal has extracted the index

portion of the paper book and has come to the conclusion that

the CIT(A) was justified in setting aside the disallowance.

Unfortunately, the CIT(A) did not examine the merits of the

mater and all that it was to extract the decision of this

Court in the case of M/s. Nishan Indo Commerce Ltd. (supra)

and in the last paragraph made a cryptic finding that the

Tribunal has discharged his onus by providing sufficient

documentary evidence to the assessing officer. Thus, in the

absence of examination of facts either by the CIT(A) or by the

Tribunal, we need to brand both the orders, that is, the order

passed by the CIT(A) as well as the Tribunal as being perverse

and thereby required to be set aside.

Accordingly, the appeal is allowed. The order passed

by the Tribunal and the order passed by the CIT(A) dated 21st

September, 2020 are set aside and the matter is remanded to

the CIT(A) for fresh consideration. The CIT(A) shall afford an

opportunity to the assessee as well as the department to

examine the documents which have been filed by the assessee

and also take note of the findings rendered by the assessing

officer in his remand report dated 17th September, 2018 and

thereafter, pass a speaking order on merits and in accordance

with law. Consequently, the substantial question of law is

left open.

With the above directions and observations, the

appeal stands disposed of. The connected application

[GA/1/2023] stands closed.

We make it clear that the merits of the matter has

not been gone into and it is for the CIT(A) to examine the

same thoroughly.

(T.S. SIVAGNANAM) CHIEF JUSTICE

(HIRANMAY BHATTACHARYYA, J.)

S.Das/