Wisdom Vinimay Private Limited, Kolkata V. ITO, Ward - 7(2), Kolkata , Kolkata

ITA 1159/KOL/2018

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Wisdom Vinimay Private Limited, a private limited company engaged in investment in shares and trading, filed an appeal against the order of the Commissioner of Income-tax (Appeals) which confirmed the additions made by the Assessing Officer. The additions pertained to a security premium of Rs. 42.07 Crores credited to the company's books, which was treated as unexplained cash credit under Section 68 of the Income Tax Act, 1961, and a disallowance of Rs. 4,900 for lack of supporting documents. The Tribunal noted the assessee's repeated non-compliance with notices and summons, both at the assessment and appellate stages, leading to the conclusion that the assessee failed to prove the identity, creditworthiness of the shareholders, and the genuineness of the transactions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 128795 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 20-11-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 27-05-2018
• Other Referred Cases: CIT vs. Durga Prasad More, Sumati Dayal vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Opportunity of being heard; Additional evidence; Reasonable cause
• Section: 68; 143(3); 142(1); 250; 143(2)

Judgement Text

आयकर अपीलीय अधिकरण कोलकाता 'सी' पीठ, कोलकाता म ें IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘C’ BENCH, KOLKATA डॉ. मनीष बोरड, ल े खा सदस्य एवं श्री संजय शमा ा , न्याधयक सदस्य क े समक्ष Before DR. MANISH BORAD, ACCOUNTANT MEMBER & SONJOY SARMA, JUDICIAL MEMBER I.T.A. No.: 1159/KOL/2018 Assessment Year: 2012-13 Wisdom Vinimay Private Limited.............................Appellant [PAN: AAACW 9823 C] Vs. ITO, Ward-7(2), Kolkata........................................Respondent Appearances by: None appeared on behalf of the Assessee. Sh. G. Hukugha Sema, CIT, appeared on behalf of the Revenue. Date of concluding the hearing : November 21 st , 2022 Date of pronouncing the order : January 16 th , 2023 ORDER Per Manish Borad, Accountant Member: This appeal filed by the assessee pertaining to the Assessment Year (in short “AY”) 2012-13 is directed against the order passed u/s 250 of the Income Tax Act, 1961 (in short the “Act”) by ld. Commissioner of Income-tax (Appeals)-3, Kolkata [in short ld. “CIT(A)”] dated 22.03.2018 arising out of the assessment order framed u/s 143(3) of the Act dated 26.03.2015. I.T.A. No.: 1159/KOL/2018 Assessment Year: 2012-13 Wisdom Vinimay Private Limited. Page 2 of 6 2. When the case was called for, none appeared on behalf of the assessee. A perusal of the records shows that a number of opportunities have been given to the assessee but there is no compliance. It seems that the assessee is not interested to pursue the appeal and, therefore, we decide to adjudicate the appeals with the assistance of ld. D/R and the available records. 3. The assessee is in appeal before this Tribunal raising the following grounds: “1. For that the Ld. CIT (A) erred in deciding the appeal ex-parte without allowing the appellant any proper opportunity of being heard. 2. For that the appellant craves leave to produce additional evidences in terms of Rule 46A of the Income Tax Rules 1962. 3. For that the order passed by the Ld. CIT (A) is bad in law since the Ld. CIT (A) has not decided the issues ground wise in respect of the grounds raised by the appellant in the Memo of Appeal. 4. For that the Ld. CIT (A) is bad in law since the order passed is not any speaking order nor the Ld. CIT(A) has looked into the assessment records and relevant materials to conclude that the order of the Ld. AO cannot be interfered with. 5. For that on the facts and in the circumstances of the case the order passed by the Ld. CIT (A) is not maintainable. 6. For that the order of the Ld. AO be modified and the assessee be given relief prayed for. 7. For that the assessee craves leave to add, alter or amend any ground before or at the time of hearing.” 4. Brief facts of the case as culled out from the records are that the assessee is a private limited company engaged in the business of investment in shares and trading. NIL income declared in the e-return of income filed on 19.10.2013 for AY 2012-13. Case selected for scrutiny through CASS followed by I.T.A. No.: 1159/KOL/2018 Assessment Year: 2012-13 Wisdom Vinimay Private Limited. Page 3 of 6 serving of notices u/s 143(2) & 142(1) of the Act. There was repeated non-compliance by the assessee to the notices and summons issued. Final notice was again issued on 25.02.2015 show causing the assessee as to why not the sum of Rs. 42.07 Cr. credited in the books of accounts towards security premium should be treated as unexplained cash credit u/s 68 of the Act and why not expenses of Rs. 4,900/- be disallowed for non- production of supporting documents. Again, the assessee failed to appear. Ld. AO after giving a detailed finding and referring to the judicial pronouncements, came to a conclusion that the assessee miserably failed to prove the identity and creditworthiness of the shareholders and the genuineness of the transaction and therefore, following the ratio laid down by the Hon’ble Supreme Court in the case of CIT vs. Durga Prasad More reported in 82 ITR 540 and in the case of Sumati Dayal vs. CIT reported in 214 ITR 801 made the addition for the unexplained security premium u/s 68 of the Act and also disallowed the expense of 4,900/- and framed the best judgment u/s 143(3) of the Act on 26.03.2015 assessing the income at Rs. 42,07,04,900/-. 5. Aggrieved, the assessee preferred appeal before ld. CIT(A) but on three occasions assessee failed to appear and the assessee kept on asking for further adjournments on one pretext or another. Since the assessee failed to produce any material to controvert the finding of ld. AO and the conduct of the assessee being consistent of avoiding the date of hearing, ld. CIT(A) confirmed the additions made by ld. AO. I.T.A. No.: 1159/KOL/2018 Assessment Year: 2012-13 Wisdom Vinimay Private Limited. Page 4 of 6 6. Aggrieved the assessee is now in appeal before this Tribunal. On multiple occasions notice of hearing were sent through registry post but there is no compliance. Ld. D/R supported the order of both the lower authorities and stated that impugned additions should be confirmed. 7. We have heard rival contentions and perused the records placed before us. Addition u/s 68 of the Act for unexplained cash credit (security premium) at Rs. 42.07 Cr. and disallowance of Rs. 4,900/- are in challenge before us by the assessee. We observe that the assessee which is a private limited company and is statutorily required to maintain its books of accounts and get them audited is in the business of investment in shares and trading. NIL income declared in the e- return. Security premium of Rs. 42.07 Cr. received during the year. Ld. AO asked the assessee to explain the said credit on multiple occasions which the assessee was duty bound to explain so as to avoid the invocation of the provisions of Section 68 of the Act which relates to unexplained cash credit. It is not in dispute that the assessee received the alleged sum during the year towards security premium. Ld. AO was justified in asking the assessee to prove the identity and creditworthiness of the shareholders/share applicants and the genuineness of the transaction. However, all the efforts of ld. AO went in vain as the assessee did not comply to any of the notices and even before the ld. CIT(A) the assessee did not appear on any occasion and similar lethargic approach of the assessee continued before this Tribunal. Also, the assessee has not filed any application stating any reasonable cause for not appearing I.T.A. No.: 1159/KOL/2018 Assessment Year: 2012-13 Wisdom Vinimay Private Limited. Page 5 of 6 on the given dates of hearing. Except filing the appeal, there is no other effort from the side of the assessee to pursue its appeal. Unless and until the documents and the other materials are filed to explain the alleged cash credit it is not possible to accept the grounds raised by the assessee and thus, it is presumed that the assessee is unable to explain the source of alleged security premium. 8. Under these given facts and circumstances of the case, we fail to find any infirmity in the detailed finding of ld. AO as well as ld. CIT(A) duly supported by judicial pronouncements and therefore, the addition for unexplained security premium u/s 68 of the Act is confirmed. Thus, all the grounds raised by the assessee are dismissed. 9. In the result, the appeal filed by the assessee is dismissed. Kolkata, the 16 th January, 2023 Sd/- Sd/- [Sonjoy Sarma] [Manish Borad] Judicial Member Accountant Member Dated: 16.01.2023 Bidhan (P.S.) I.T.A. No.: 1159/KOL/2018 Assessment Year: 2012-13 Wisdom Vinimay Private Limited. Page 6 of 6 Copy of the order forwarded to: 1. Wisdom Vinimay Private Limited, 8A, Kalachand Patitundy Lane, Cossipore, Kolkata-700 002. 2. ITO, Ward-7(2), Kolkata. 3. CIT(A)-3, Kolkata. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata