Shantananda Steels Pvt. Ltd., CHENNAI V. ITO Ward 6(2), CHENNAI

ITA 1173/CHNY/2019

AI Insights

The case involves Shantananda Steels Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals)-15, Chennai, which had confirmed the addition made by the Income Tax Officer, Ward 6(2), Chennai. The addition pertained to an investment of Rs. 3,50,50,000 in the share capital of SBQ Steels Ltd., which was treated as unexplained income under section 68 of the Income Tax Act, 1961. The Tribunal dismissed the appeal due to lack of evidence from the assessee to substantiate the source of the investment.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 128451 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-11-2022
• Assessment Year: misc
• Appeal Filed On: 22-10-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital Gains

Judgement Text

आयकर अपीलȣय अͬधकरण,‘बी’ Ûयायपीठ,चेÛनई IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI ᮰ी महावीर ᳲसह, उपा᭟यᭃ एवं ᮰ी मनोज कुमार अᮕवाल, लेखा सद᭭य के समᭃ BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 1173/CHNY/2019 िनधाᭅरण वषᭅ/Assessment Year: 2012-13 Shantananda Steels Pvt. Ltd., 403, Thiruvottiyur High Road, Thiruvottiyur, Chennai – 600 019. PAN : AAACS 5070K Vs. The Income Tax Officer, Ward - 6(2), Chennai. (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri B. Ramakrishnan, FCA ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri Guru Bashyam, CIT स ु नवाई कȧ तारȣख/Date of Hearing : 02.11.2022 घोषणा कȧ तारȣख/Date of Pronouncement : 25.11.2022 आदेश /O R D E R PER MAHAVIR SINGH, VP: This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals)-15, Chennai in ITA No.256/2012-13/CIT(A)-15/2015-16 dated 31.03.2017. The assessment was framed by the Income Tax Officer, Ward 6(2), Chennai for the assessment year 2012-13 u/s.143(3) of the Income Tax Act, 1961, (hereinafter ‘the Act’) vide order dated 31.03.2015. - 2 - ITA Nos.1173/Chny/2019 2. At the outset, it is noticed that the appeal filed by the assessee is barred by limitation by 693 days. The order of CIT(A) dated 31.03.2017 was received by assessee on 31.03.2017 as per Form 36. The appeal has to be filed on or before 31.05.2017 but was filed only on 23.04.2019. The assessee has filed affidavit for condonation of delay, stating the following reasons:- 3. The Deponent submits as the addition was deleted the deponent was advised by their counsel that no further appeal is required. 4. Based on the order of the Commissioner of Income Tax (Appeals)-15 dated 31.12.2017 the share application money received was assessed in the AY 2011-12. It is only during this that the issue came to light the an appeal ought to have been filed by the deponent against the Commissioner of Income Tax (Appeals) order, though the addition was deleted for the AY 2012-13, it had an impact in the assessment year 2011-12.However, there was a change in counsel at this time and the issue was not addressed to the new counsel. 5. Subsequently the deponent was advised by the new counsel that an appeal is to be filed against the order of the Commissioner of Income Tax (Appeals)-15 dated 31.03.2017 as it has an impact on the assessment for the AY 2011-12. 6. The deponent now files the appeal before this Hon'ble Tribunal with a delay of 693 days. - 3 - ITA Nos.1173/Chny/2019 When these facts were confronted to ld.CIT-DR, he objected for condoning the delay. We find the cause as reasonable and hence, condone the delay and admit the appeal. 3. The only issue in this appeal of assessee is that the assessee had challenged the addition of investment made in share capital of SBQ Steels Ltd., by AO as unexplained income u/s.68 of the Act for assessment year 2012-13 at Rs.3,50,50,000/-:- 4. We have heard rival contentions and gone through facts and circumstances of the case. We noted a search action u/s.132 of the Act was carried out in the case of assessees and its group companies, in connection with the search in the case of other concerns of Kolkata companies on 26.09.2012. The AO noted that the assessee have made investments in share capital of its group companies i.e., SBQ Steels Ltd., and RKKR Steels Ltd., of Rs.3,50,50,000/- in assessment year 2012-13, out of the alleged claim of sale proceeds of its share investments. The AO after considering the enquiry conducted by the investigation wing and that these investments are out of sale proceeds of alleged share from shell companies of Kolkata, providing accommodation entries on - 4 - ITA Nos.1173/Chny/2019 commission basis, the AO noting the following facts confirmed the addition:- (i) The assessee did not have the share capital and share premium. Their existence was not proved beyond doubt. (ii) The assessee did not have the capacity to command share premium as it did not have any asset backing of any king and income of scale. (iii) The existence of share investments were not proved beyond doubt. Hence, the claimed sale proceeds are receipts originated from unknown sources. The only evidences were photo copies of self-made computer printed invoices whose genuineness was not proved. (iv) The erstwhile Directors were never produced before this office. No contact particulars, communication details were furnished. Hence, these so called Directors are only name lenders who could not be traced. (v) The assessee as well as its group companies did not explain how they came to know each other. Only vague replies were furnished. Hence, genuineness of the claimed business transactions, was not proved. (vi) Further No capital gains were ever offered. If these companies were really dealing in share investments, particularly as unquoted equities were not exempt from tax, the requisite evidences to prove the cost as well as sale price valuations must have been kept. Lack of them only point to the fact such activities were not carried out in reality. (vii) Complete financial documents for earlier years (beyond A.Y:2007-08) were not furnished to evidence the scale of the activities of the assessee and other similar companies. (viii) The alleged share holder companies as well as companies whose share investments were statedly held were all un-listed companies based at Kolkata and many share the same address. - 5 - ITA Nos.1173/Chny/2019 Aggrieved, assessee preferred appeal before CIT(A). The CIT(A) also confirmed the action of the AO. Aggrieved, assessee came in appeal before the Tribunal. 5. Now before us, nothing was produced by the assessee to prove that the investments in shares of SBQ Steels Ltd., of Rs.3,50,50,000/- in assessment year 2012-13, is out of the explained investment. Since the assessee could not produce anything before us, we dismiss this issue of assessee and the orders of the lower authorities are confirmed. 6. In the result, the appeal filed by the assessee is dismissed. Order pronounced in the court on 25 th November, 2022 at Chennai. Sd/- Sd/- (मनोज कुमार अᮕवाल) (MANOJ KUMAR AGGARWAL) लेखा सद᭭य/ACCOUNTANT MEMBER (महावीर ᳲसह ) (MAHAVIR SINGH) उपा᭟यᭃ /VICE PRESIDENT चे᳖ई/Chennai, ᳰदनांक/Dated, the 25 th November, 2022 RSR आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ )अपील(/CIT(A) 4. आयकर आयुᲦ /CIT 5. िवभागीय ᮧितिनिध/DR 6. गाडᭅ फाईल/GF.