Somnath Commosales Pvt. Ltd., , Kolkata V. ITO, Ward - 7(3), Kolkata, Kolkata

ITA 1294/KOL/2018

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 8725 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-09-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 11-06-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 144; 143(3); 142(1); 143(2)

Judgement Text

1. ITA No. 1294/Kol/2018 AY 2012-13 Somnath Commosales Pvt. Ltd. आयकर अपीलीय अिधकरण कोलकाता 'ए' पीठ, कोलकाता म ¤ IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘A’ BENCH, KOLKATA डॉ मनीष बोरड, ल े खा सदÖय एवं ®ी संजय शमा ª , Æयाियक सदÖय क े सम± Before DR. MANISH BORAD, ACCOUNTANT MEMBER & SONJOY SARMA, JUDICIAL MEMBER आयकर अपील सं ́या: 1294 /कोल/ 2018 िनधा ª रण वष ª ः 2012-13 I.T.A. No.: 1294/Kol/2018 Assessment Year: 2012-13 Somnath Commosales Pvt. Ltd................................Appellant [PAN: AAOCS 2263 G] Vs. ITO, Ward-7(3), Kolkata........................................Respondent Appearances by: None appeared on behalf of the Assessee. Md. Ghayasuddin, CIT, DR appeared on behalf of the Revenue. Date of concluding the hearing : September 20, 2022 Date of pronouncing the order : November 10, 2022 आदेश /O R D E R PER SONJOY SARMA, JUDICIAL MEMBER: This appeal of the assessee for the assessment year 2012-13 is directed against the order dated 20.02.2018 passed by the ld. Commissioner of Income-tax, Appeals [in short, hereinafter referred to as ‘the ‘ld. CIT(A)-18, Kolkata]. 2. ITA No. 1294/Kol/2018 AY 2012-13 Somnath Commosales Pvt. Ltd. 2. When the case was called for, none appeared on behalf of assessee. A perusal of file shows that number of notices of hearing were sent including few through RP/AD, which have been returned unserved by the postal department. Asessee has not filed any paper book or written submissions. It seems that assessee is not interested to pursue this appeal. We, therefore, deem it proper to adjudicate the appeal on merits ex parte qua the assessee on the basis of material available on record and the assistance of the ld. DR. 3. The assessee has raised the following grounds of appeal for the AY 2012-13:- “i. That the action of ld. CIT(A) by passing the order in favour of the revenue on the grounds of no one appeared from the appellant is liable to set aside. We (appellant) had not received the notices dated 28.12.2017 and 24.01.2018 so we were unable to attend the hearing on the mentioned date. ii. As we had not received the notices of the hearing so there was reasonable cause for non-appearance before the CIT(A) for representing the case. iii. As we had appeared before the AO and requested for providing adjournment which was not provided by the AO. AO added the entire share capital along with security premium amounting to Rs. 9,80,00,000/- u/s 68 as explained cash credit. iv. AO has also added income of Rs. 28,263/- by disallowing expenses u/s 14A. v. For that the addition as aforesaid and duly confirmed by the CIT(A) is illegal arbitrary and bad in law. vi. For that we (assessee) carve to put forward additional information at the time of hearing.” 4. Brief facts of the case are that the assessee is a private limited company. The source of income is stated to be from investment in shares. Income at Rs. 10,56,450/- declared in e-return of income filed on 03.04.2014 for the AY 2012-13. Case selected for scrutiny through CASS (Computer Assisted Scrutiny Selection) followed by serving of statutory notices u/s. 143(2) and 142(1) upon the assessee. The ld. AO observed that the assessee company has received an amount of Rs. 50,00,000/- as fresh capital and Rs. 9,31,00,000/- as security premium. 3. ITA No. 1294/Kol/2018 AY 2012-13 Somnath Commosales Pvt. Ltd. As there was no compliance on the part of the assessee in response to notice u/s 143(2) and notice u/s 142(1) and it was not possible for the ld. AO for examination/verification of (i) identity (ii) existence/identity/sources of funds and creditworthiness (iii) genuineness of the transaction. Therefore, the ld. AO proceeded to frame the assessment u/s. 143(3) of the Act on the basis of as material available before him. The ld. AO was not satisfied with the identity, creditworthiness and genuineness of said transaction of share capital/ share premium of Rs. 9,80,00,000/- received by the assessee company from the alleged subscribers/creditors. He accordingly completed/passed the assessment u/s. 144 of the Act making addition u/s. 68 of the Act for unexplained cash credit of Rs. 9,80,00,000/- and assessed assessee’s income at Rs. 9,80,00,000/-. 5. Aggrieved, the assessee preferred appeal before the ld. CIT(A) challenging the impugned addition made u/s. 68 of the Act at Rs. 9,80,00,000/-. Apart from filing appeal, the assessee made no further efforts before the ld. CIT(A) did not file any other documentary evidence in support of its claim. As the assessee failed to do so, ld. CIT(A) confirmed the addition. 6. Aggrieved, now the assessee is in appeal before this Tribunal. Again the assessee failed to appear before us on any of the dates of hearing. Except filing this appeal before us. It clearly indicates that the assessee is only trying to delay the proceeding and has nothing to place on record. On the other hand, the ld. DR vehemently argued supporting the orders of lower authorities and prayed for confirming the order of ld. CIT(A). 4. ITA No. 1294/Kol/2018 AY 2012-13 Somnath Commosales Pvt. Ltd. 7. We have heard the ld. DR and perused the material placed on record before us. The assessee has challenged the finding of the ld. CIT(A) confirming the addition made u/s. 68 of the Act at Rs. 9,80,00,000/- by the ld. AO for unexplained cash credits of share capital and security premium received during the year. We notice that the assessee company had offered income of Rs. 10,56.450/- for the AY 2012-13. The assessee company has been able to procure share capital/share premium at Rs. 9,80,00,000/- and notice u/s. 143(1)/143(2) of the Act duly served upon the assessee but none complied. Assessee failed to produce the alleged shareholders before the ld. AO for identity, creditworthiness and genuineness of the transaction. Even after providing sufficient opportunity no submission was made either before the ld. AO and ld. CIT(A) nor before us in this regard. The assessee was asked to explain the cash credits received by it during the year. The assessee failed to file necessary details to explain the source of alleged cash credit and also unable to prove identity, creditworthiness of the cash creditors as well as genuineness of the transaction as per section 68 of the Act. The assessee company has miserably failed to explain the source of alleged cash credit. If the assessee had sufficient details to explain the alleged sum, it could have certainly filed those details. Consistently escaping from appearing before the ld. AO and the appellate authority (ld. CIT-A) indicates that the assessee has no plausible explanation to explain the source of alleged sum of share capital and security premium. If the assessee is unable to explain the alleged cash credit and consistent escaped, the provisions of section 68 of the Act are attracted. Thus, it is held that the assessee has routed its unaccounted income in the books of account in the form of share capital and security premium by arranging bogus share capital and share premium through accommodation entry provider.