M/s. Coolhut Commotrade Pvt. Ltd., , Kolkata V. ITO, Ward - 14(1), Kolkata , Kolkata

ITA 1296/KOL/2018

AI Insights

M/s. Coolhut Commotrade Pvt. Ltd appealed against the order of the Learned Commissioner of Income Tax (Appeal) - 5, Kolkata, which confirmed the addition of Rs. 2,51,00,000 as bogus share application money. The addition was initially made by the Assessing Officer under Section 68 of the Income Tax Act, 1961, due to non-compliance by the assessee in providing details and evidence regarding the share capital introduced. The Tribunal noted the non-appearance of the assessee at various stages and the lack of cooperation in providing required documents and details, leading to the dismissal of the appeal.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 136125 (ITAT-KOLKATA)
• Duration Of Justice: 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 14-12-2022
• Assessment Year: misc
• Appeal Filed On: 12-12-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Keywords: Bogus Share capital; Set aside
• Section: 131; 68; 143(3); 142(1); 133(6); 250; 143(2)

Judgement Text

। आयकर अपीलीय अिधकरण ᭠यायपीठ, कोलकाता । IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA BEFORE SHRI RAJPAL YADAV, HON’BLE VICE PRESIDENT AND SHRI GIRISH AGRAWAL, HON’BLE ACCOUNTANT MEMBER I.T.A. No. 1296/Kol/2018 Assessment Year: 2012-13 M/s. Coolhut Commotrade Pvt. Ltd. RGM 18/22 Jhowtolla, Teghoria Kolkata - 700157 [PAN : AAECC6807E] Vs I.T.O., Ward – 14 (1), Kolkata सुनवाई कᳱ तारीख/Date of Hearing : 15/12/2022 घोषणा कᳱ तारीख /Date of Pronouncement: 16/12/2022 आदेश/O R D E R PER SHRI RAJPAL YADAV, VICE PRESIDENT: The present appeal is directed at the instance of the assessee against the order of the Learned Commissioner of Income Tax (Appeal) - 5, Kolkata (hereinafter the “ld. CIT(A)”) dt. 29/11/2016, passed u/s 250 of the Income Tax Act, 1961 (“the Act’), for Assessment Year 2012-13. 2. The assessee has taken five grounds of appeal. However, its substantial grievance has been pleaded in Ground No. 4, wherein the assessee has submitted that the ld. CIT(A) has erred in confirming the addition of Rs.2,51,00,000/- by way of an ex-parte order. This addition was made by the Assessing Officer with the aid of Section 68 of the Act on account of bogus share application money introduced by the assessee. 3. In response to the notice of hearing no one has come present on behalf of the assessee. With the assistance of the ld. D/R we have gone through the record carefully. It emerges out from the record that the assessee has filed its return of income electronically on 26/09/2012 अपीलाथᱮ/ (Appellant) ᮧ᭜ यथᱮ/ (Respondent) Assessee by : None Revenue by : Smt. Ranu Biswas, Addl. CIT, D/R I.T.A. No. 1296/Kol/2018 Assessment Year: 2012-13 M/s. Coolhut Commotrade Pvt. Ltd 2 declaring total income at Rs.1087/-. The case of the assessee was selected for scrutiny assessment and a notice u/s 143(2) of the Act was issued and served upon the assessee. On scrutiny of the accounts it revealed to the Assessing Officer that the assessee company has introduced fresh share capital including share premium of Rs.2,51,00,000/-. The Assessing Officer issued summons as well as notice u/s 131 and 142(1) of the Act. The Assessing Officer directed the directors of the assessee company to appear before him as well as to produce the directors/management persons of the share applicant companies. The assessee failed to comply with both these notices. Neither its directors appeared before the Assessing Officer nor did it submit any other details. Hence, the ld. Assessing Officer treated the alleged share capital as bogus and made the addition u/s 68 of the Act of Rs.2,51,00,000/-. 3.1. Dissatisfied with the assessment order, the assessee carried the matter in appeal before the ld. CIT(A). No one has appeared on behalf of the assessee before the ld. CIT(A), therefore, the ld. CIT(A) dismissed the appeal of the assessee for want of prosecution. 4. On due consideration of the record, we find that sub-Section (6) of Section 250 of the Act, puts an obligation upon the ld. CIT(A) to state the points in dispute and thereafter record reasons on such points. The ld. CIT(A) has failed to adhere to this position. Ideally, even on account of non- appearance of the assessee, the ld. CIT(A) ought to have decided the appeal on merits after taking cognizance of all the details. We would have removed this irregularity and remitted this issue to the file of the ld. CIT(A) but we find that the assessee did not co-operate with the Assessing Officer nor did it file any fresh material before the ld. CIT(A). Therefore, we ourselves took an exercise to examine the complete details available on record and find out if the assessee has any arguable case otherwise it will be a futile exercise of I.T.A. No. 1296/Kol/2018 Assessment Year: 2012-13 M/s. Coolhut Commotrade Pvt. Ltd 3 multiplying the litigation by remanding it to the ld. First Appellate Authority. Therefore, with the assistance of the ld. D/R, we have gone through the record and particularly, the statement of facts filed before the ld. CIT(A). It has been pleaded in the statement of facts that the Assessing Officer had issued notice u/s 133(6) of the Act to the subscribers of shares and none of the subscribers had filed complete details with audited accounts and copies of ITRs, explanation for source of funds but the Assessing Officer failed to notice that all these subscribers are group of assessees who have been assessed to income tax for many years and many of them u/s 143(3) of the Act. 4.1. On the strength of the above, assessee has pleaded that the addition ought not to have been made. It is pertinent to note that the assessee itself has not filed anything. It was an obligation upon the assessee to prove the identities of the share applicant, their creditworthiness and the genuineness of the transactions. It is the assessee who should have demonstrated the financial health of the share applicants but it did not file anything. It even has not demonstrated as to how it can command share premium on the subscription of its shares. Therefore, we are of the view that since the assessee has not discharged the onus put upon it by Section 68 of the Act, there is no need to set aside the impugned order and restore the file to the ld. First Appellate Authority. There is no merit in this appeal, hence it is dismissed. 5. In the result, appeal of the assessee is dismissed. Order pronounced in the Court on 20 th December, 2022 at Kolkata. Sd/- Sd/- (GIRISH AGRAWAL) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE-PRESIDENT Kolkata, Dated 20/12/2022 *SC SrPs I.T.A. No. 1296/Kol/2018 Assessment Year: 2012-13 M/s. Coolhut Commotrade Pvt. Ltd 4 आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant 2. ᮧ᭜यथᱮ / The Respondent 3. संबंिधत आयकर आयुᲦ / Concerned Pr. CIT 4. आयकर आयुᲦ)अपील (/ The CIT(A)- 5. िवभागीय ᮧितिनिध ,आयकर अपीलीय अिधकरण, कोलकाता/DR,ITAT, Kolkata, 6. गाडᭅ फाईल /Guard file. आदेशानुसार/ BY ORDER, TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Kolkata