ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 4(1), INCOME TAX, KOLKATA V. APS ENERGY PRIVATE LIMITED, KOLKATA

ITA 2308/KOL/2024

AI Insights

The case involves the Assistant Commissioner of Income Tax, Central Circle 4(1) as the appellant and APS Energy Private Limited as the respondent. The dispute centered on the deletion of an addition of \\u20b92,00,45,000 made by the Assessing Officer (AO) as unexplained cash credit under section 68 of the Income Tax Act, which was later deleted by the CIT(A). The AO had questioned the share capital and share premium raised by the assessee from two parties, citing non-compliance with summons under section 131 of the Act. However, the CIT(A) found that the assessee had adequately responded to the queries and that the assessment was prematurely concluded before the date fixed for appearance in the summons, thus violating the principles of natural justice.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314055 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Other Referred Cases: PCIT Vs Outcome Buildcom Pvt Ltd. ITAT/3/2024 (Cal) dated 3.5.2024, PCIT Vs Snowwhite Infrastructure Pvt, Ltd.(ITAT/108/2024(Cal) dated 15.5.2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALTAF HUSSAIN
• Assessee Lawyers: A. K. TULSYAN
• Keywords: Unexplained cash credit; Principle of natural justice
• Section: 68; 131

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI SONJOY SARMA, JM ITA No.2308/KOL/2024 (Assessment Year:2015-16) Asst. Commissioner of Income Tax, Central Circle 4(1) Aaykar Bhavan Poorva, 110, Shanti Pally, Kolkata-700107 West Bengal Vs. APS Energy Private Limited Room No. 452 & 453, Marchall House, 33/1, Netaji Subhas road, Kolkata-700001, West Bengal (Appellant) (Respondent) PAN No. AAICA3205G Assessee by : Shri A.K. Tulsyan, AR Revenue by : Shri Altaf Hussain, DR Date of hearing: 24.02.2025 Date of pronouncement : 09.05.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the Revenue against the order of the Commissioner of Income-tax (Appeals) Kolkata-27 (hereinafter referred to as the “Ld. CIT(A)”] dated 08.0.2024 for the AY 2015-16. 02. The only issue raised by the Revenue is against the deletion of addition of ₹2,00,45,000/- by the ld. CIT (A) as made by the ld. AO on account of unexplained cash credit. 03. The facts in brief are that the assessee filed the return of income u/s 139(1) of the Act on 09.09.2015, declaring total income of ₹ 23,347/-. The case of the assessee was selected for scrutiny through Computer Assisted Scrutiny Selection (CASS) under limited scrutiny. Page | 2 ITA No.2308/KOL/2024 APS Energy Pvt. ltd.; A.Y. 2015-16 Accordingly, statutory notices were duly issued and served upon the assessee which the assessee complied with by furnishing the details/ evidences as called for by the ld. AO from time to time during the assessment proceedings. The AO thereafter noted on the basis of evidences filed by the assessee that the assessee has raised share capital / share premium from two parties namely; M/s Amanat Commercial Pvt. Ltd. and Classic Goods Pvt. Ltd. aggregating to ₹2,00,45,000/-. The ld. AO also issued summon u/s 131 of the Act to the a allotee companies and called upon to furnish certain details mentioned in the summons. The summon in the case of Classic Goods Pvt. ltd. was returned unserved whereas in the case of Amanat Commercial Pvt. Ltd., it was duly served but nobody appeared. The ld. AO finally made the addition of ₹2,00,45,000/- as unexplained cash credit u/s 68 of the Act on the ground that there was no compliance to the summons and therefore, the amount of share capital/ share premium could not be verified. 04. In the appellate proceedings, the ld. CIT (A) allowed the appeal of the assessee after taking into account the submissions/ contention of the assessee. While deleting the addition the ld. CIT (A) recorded a finding of facts that though the share subscriber’s M/s Amanat Commercial Pvt. Ltd. and Classical Goods Pvt. Ld. were non responsive to the summons issued u/s 131 of the Act, however, the summons u/s 131 of the Act issued to the share applicants to appear on or before 20.11.2017 but in the meantime the assessment was framed on 13.11.2017, which was not in accordance with the Principle of natural justice. Thereafter, the ld. CIT (A) relied on the various decisions and after discussing the various aspects and facts regarding the the share subscribers, allowed the appeal by observing and holding as under: - Page | 3 ITA No.2308/KOL/2024 APS Energy Pvt. ltd.; A.Y. 2015-16 “5.2.7. In light of the aforesaid judgements, as well as examining the assessee's submission and considering the assessee's contention, it is noticed that the appellant assessee has discharged its onus by providing the details of the aforesaid share applicants through various documents as mentioned in the above paras. Hence, treating share capital of Rs. 2,00,45,000 as unexplained credit u/s 68 is not logical and seems based on mere assumptions and surmises. Further the opinion formed by AO merely on basis of nonappearance of director of share applicants' company where assessment order was passed before date fixed for appearing in notice u/s 131 of the Act is not acceptable. Therefore, the addition of Rs.2,00,45,000/- is liable to be deleted. Hence, these grounds of appeal raised by the assessee are allowed.” 05. After hearing the rival contentions and perusing the materials available on record, we find that undisputedly, the assessee during the course of assessment proceedings has furnished all the evidences qua the share subscribers namely; M/s Amanat Commercial Pvt. Ltd. and Classic Goods Pvt. Ltd., names, addresses, PANs, ITRs, Audited balance sheets, bank statements, etc. We note that the ld. AO issued summons u/s 131 of the Act to both the subscribers and in the said summons, date of appearance was given as 20.11.2017, however, the ld. AO passed the assessment order on 13.11.2017. We also note that the ld. CIT (A) while passing the order has dealt with each and every aspect regarding share subscription and thereafter held that the assessee has discharged its onus cast upon it by providing the details/ evidences relating to share applicants and therefore, the share capital/ share premium was wrongly treated as unexplained cash credit u/s 68 of the Act. The ld. CIT (A) also noted that the addition cannot be made merely on the ground that there was non-appearance of the directors of the share applicant companies u/s 131 of the Act. We therefore, do not find any infirmity in the order of the ld. CIT (A) as the ld. CIT (A) has deleted the addition after following the various case laws as discussed in page no.28, 29,30,31,33 of the appellate order. The case of the assessee find support from the decisions of PCIT Vs Outcome Buildcom Pvt Ltd. ITAT/3/2024 (Cal) dated 3.5.2024 and PCIT Vs Snowwhite Infrastructure Pvt, Ltd.(ITAT/108/2024(Cal) Page | 4 ITA No.2308/KOL/2024 APS Energy Pvt. ltd.; A.Y. 2015-16 dated 15.5.2024. Considering the fact of the assessee in the light of above decisions of the Hon’ble High Court, we uphold the order of ld CIT(A) by dismissing the appeal of the revenue. 06. In the result, the appeal of the revenue is dismissed. Order pronounced in the open court on 09.05.2025. Sd/- Sd/- (SONJOY SARMA) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 09.05.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "