Assessment year: 2010-2011 Page 1 of 4 IN INCOME TAX APPELLATE TRIBUNAL, KOLKATA C(SMC) BENCH, KOLKATA Before Shri P.M. Jagtap, Accountant Member I.T .A. No. 1890 /KOL/ 2014 Assessment Year: 2010-2011 Income Tax Officer, Appellant Ward-12(3 ), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700 069 -Vs.- M/s. Indo Wagon En gineering Ltd., Respondent 228A, A.J.C. Bose Road, 5 t h Floor, Kolkata-700 020 [PAN: AABCI 1097 B] Appearances by: Shri Rajat Kumar Kureel, JCIT, D.R., for Department Shri Manoj Kataruk a, Advocate, for assessee Date of concluding th e hearing : Ju ly 21, 2016 Date of pronouncing order : September 28, 2016 O R D E R This appeal is preferred by Revenue against order of ld. Commissioner of Income Tax (Appeals)-XII, Kolkata dated 21.07.2014 and in solitary ground raised therein, Revenue has challenged action of ld. CIT(Appeals) in deleting addition of Rs.48,45,015/- made by Assessing Officer on account of alleged bogus liability. 2. assessee in present case is investment company. return of income for year under consideration was filed by it on 21.09.2010 declaring total income of Rs.16,061/-. In balance-sheet filed along with said return, sum of Rs.48,45,015/- was shown by assessee as payable to M/s. Visage Equipments Pvt. Limited as sundry creditor. In order to verify genuineness of said liability, notice under section 133(6) was issued by Assessing Officer on 29.11.2012, which could not be served by postal authority on M/s. Visage Assessment year: 2010-2011 Page 2 of 4 Equipments Pvt. Limited. When this position was confronted by Assessing Officer to Shri A.K. Goenka, Director of assessee-company, he requested Assessing Officer to send notice again. Accordingly, notice under section 133(6) was issued by Assessing Officer on 14.12.2012, in response to which, reply was filed by M/s. Visage Equipments Pvt. Limited confirming balance shown by assessee. It was, however, found by Assessing Officer from assessment records of another assessee, namely M/s. Raghav Industries Limited that similar liability shown in name of M/s. Visage Equipments Pvt. Limited was treated by Assessing Officer as bogus liability after verification. Following stand taken in case of Raghav Industries Limited, liability shown by assessee in name of M/s. Visage Equipments Pvt. Limited was treated by Assessing Officer as bogus and same amounting to Rs.48,45,015/- was added by him to total income of assessee in assessment completed under section 143(3) vide order dated 31.01.2013. 3. Against order passed by Assessing Officer under section 143(3), appeal was preferred by assessee before ld. CIT(Appeals) and after considering submissions made by assessee as well as material available on record, ld. CIT(Appeals) deleted addition of Rs.48,45,015/- made by Assessing Officer by treatin g liability shown by assessee in name of M/s. Visage Equipments Pvt. Limited as bogus for following reasons given in his impugned order:- It is noted that entire basis of assessment of Assessing Officer is on th e reliance of Investigation Report as well ass Assessment Order framed in case o f Raghav Indust ries Limited. It is not kno wn as to wh at is status of case of Ragh av Indust ries Limited as Appellant is not having any relatio nship with company viz. Ragh av Indust rie s Limited, and if at all wh atever is th e outco me of assessment framed is not known and no t relevant in deciding this issue in hand. Assessing Officer has not conducted any independent inquiry to find out whether shares purchased from Visage Equipments Pvt . Ltd. were genuine o r not. prima facie details and findings submitted by th e Appel lant does not in any Assessment year: 2010-2011 Page 3 of 4 manner point that th ere was any non- genuinity in respect of shares purchased. Appellant had purchased f rom Visage Equipments Pvt . Lt d. shares which has been even ment ioned in assessment order for amount of RS.4,04 ,54,015/- and during impugned assessment year Appellant paid amount of RS.3 ,56,09,000/- to Visage Equipments Pvt . Ltd. and balance of Rs.48,4 5,015/- was standing as Sundry Credito rs. Therefo re, when investment made by Appellant are accept ed by Assessing Officer fro m same party and when payment s made during year to t he same party h ave been accept ed by Assessing Officer, then it is not understood as to how Sundry Credito rs amount is bogus? whole basis of assessment and addition, in my opinion, is on wrong footing and basis of another assessment order which does not fulfil crit eria o r tests for making addit ions in case of appellant. I am of considered view th at on basis of facts of case, issue in hand should have been int rospected to come to finding whether Sundry Credito rs are genuine o r not . However, it is observed that Assessing Officer has not come to any inde pendent finding during rel evant year th at Sundry Creditors are not genuine expect relying on o r referring assessment framed in case o f Ragh av Industries Limited for Asst . Year 2009-10. In light of above discussio n & finding, perusing entire facts of case, I am of considered view that th e addit ion made by Assessing Officer based on entirel y wro ng footing and cannot stand test of law. Hence, addit ion made by th e AO is h ereby directed to be deleted. Thus these grounds of appeal of appellant are allowed as indicated above . Aggrieved by order of ld. CIT(Appeals), Revenue has preferred this appeal before Tribunal. 4. I have heard arguments of both sides and also perused relevant material available on record. It is observed that impugned addition of Rs.48,45,015/- was made by Assessing Officer to total income of assessee by treating liability in name of M/s. Visage Equipments Pvt. Limited as bogus by mainly relying on assessment order passed in case of another assessee namely M/s. Raghav Industries Limited, wherein liability appearing in name of said party was treated by Assessing Officer as bogus. As pointed out by Assessment year: 2010-2011 Page 4 of 4 ld. counsel for assessee from copies of relevant orders, order of Assessing Officer passed in case of M/s. Raghav Industries Limited on this issue has already been reversed by ld, CIT(Appeals) vide his order dated 30.09.2014 and appeal filed by Revenue against said order has been dismissed by Tribunal vide its order dated 20.01.2016 passed in ITA No.2268/KOL/2014 on account of low tax effect involved therein. Keeping in view this position as well as reasons given by ld. CIT(Appeals) in his impugned order, I find no infirmity in impugned order of ld. CIT(Appeals) deleting addition of Rs.48,45,015/- made by Assessing Officer to total income of assessee on account of alleged bogus liability. same, is therefore, upheld and this appeal of Revenue is dismissed. 5. In result, appeal of Revenue is dismissed. Order pronounced in open Court on September 28, 2016. Sd/- (P.M. Jagtap) Accountant Member Kolkata, 28 t h day of September, 2016 Copies to : (1) Income Tax Officer, Ward-12(3 ), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700 069 (2) M/s. Indo Wagon En gineering Ltd., 228A, A.J.C. Bose Road, 5 t h Floor, Kolkata-700 020 (3) Commissioner of Income Tax (Appeals)-XII, Kolkata; (4) Commissio ner of Income Tax- , (5) Depart ment al Represent ative (6) Guard File By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S. Income-tax Officer, Ward-12(3), Kolkata v. M/s. Indo Wagon Engineering Ltd