Royalpet Traders Pvt. Ltd., Kolkata V. I.T.O.,Ward-4(1), Kolkata

ITA 133/KOL/2020

AI Insights

Royalpet Traders Pvt. Ltd. appealed against the order of the Commissioner of Income-tax (Appeals)-10, Kolkata, which upheld the addition of Rs. 9,91,00,000 as unexplained share capital and share premium under section 68 of the Income Tax Act, 1961. The addition was initially made by the Assessing Officer and confirmed by the CIT(A) without a proper hearing, as the assessee failed to appear due to a change in the notice serving system. The Tribunal found that the assessee was not given a fair opportunity to present its case and thus restored the matter to the CIT(A) for a fresh decision.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 128691 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Next Hearing Date: 28-09-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 30-01-2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Opportunity of being heard; Reasonable cause
• Section: 68; 143(3); 250

Judgement Text

आयकर अपीलीय अधिकरण कोलकाता 'ए' पीठ, कोलकाता म ें IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘A’ BENCH, KOLKATA श्री संजय गग ग , न्याधयक सदस्य एवं डॉ. मनीष बोरड, ल े खा सदस्य क े समक्ष Before SRI SANJAY GARG, JUDICIAL MEMBER & DR. MANISH BORAD, ACCOUNTANT MEMBER I.T.A. No.: 133/Kol/2020 Assessment Year: 2012-13 Royalpet Traders Pvt. Ltd........................................Appellant [PAN: AAFCR 7873 N] Vs. ITO, Ward-4(1), Kolkata........................................Respondent Appearances by: Sh. Manoj Kataruka, Adv., appeared on behalf of the Assessee. Sh. Biswanath Das, CIT (D/R), appeared on behalf of the Revenue. Date of concluding the hearing : September 29 th , 2022 Date of pronouncing the order : January 2 nd , 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)-10, Kolkata [in I.T.A. No.: 133/Kol/2020 Assessment Year: 2012-13 Royalpet Traders Pvt. Ltd. Page 2 of 4 short ld. “CIT(A)”] dated 02.12.2019 arising out of the assessment order framed u/s 143(3) of the Act dated 10.03.2015. 2. The assessee is in appeal before the Tribunal raising the following grounds: “1. That on the facts and circumstances of the case, the action of the Ld. CIT(A) to uphold the addition of Rs.9,91,00,000/- on account of share capital u/s 68 of the Act, made by the AO is contrary to the material evidences on record and the addition made is arbitrary, excessive and bad in law. 2. That on the facts and circumstances of the case, the action of the Ld. CIT(A) to uphold the disallowance of Rs.9,91,00,000/- on account of share capital by treating it as unexplained cash credit u/s 68 of the Act, made by the AO is without considering the evidences and submissions filed and the addition made is in violation of the principles of natural justice and therefore the addition made is arbitrary, excessive and bad in law. 3. That the order of the Ld. CIT(A) upholding the additions made by the Assessing Officer is illegal, arbitrary and bad in law. 4. That the above grounds of appeal shall be argued in detail at the time of hearing and the appellant craves leave to submit, add, alter, modify, amend any grounds of appeal or submit any additional grounds of appeal at or before the time of hearing.” 3. At the outset, ld. Counsel for the assessee stated that the assessee did not get fair opportunity to plead its case before ld. CIT(A) nor could file various evidences explaining the source of share capital and share premium totalling to Rs. 9.91 Cr. Prayer was made to restore the issue raised on merit to ld. CIT(A) for afresh adjudication considering the details filed during the course of hearing before this Tribunal. 4. On the other hand, ld. D/R though supported the order of ld. CIT(A) stating it to be a well-reasoned order but could not I.T.A. No.: 133/Kol/2020 Assessment Year: 2012-13 Royalpet Traders Pvt. Ltd. Page 3 of 4 controvert the fact that the impugned order was framed ex-parte qua the assessee. 5. We have heard rival contentions and perused the records placed before us. Addition u/s 68 of the Act at Rs. 9.91 Cr for unexplained share capital and share premium is in challenge before us. During the course of assessment proceedings, the assessee was asked to explain the share capital of Rs. 1.99 lakh and share premium received on such share capital at Rs. 9,89,01,000/-. However, in spite of sufficient opportunity, the assessee failed to discharge the primary onus casted upon it to explain the source of the share capital and share premium raised. Ld. AO made the addition u/s 68 at Rs. 9.91 Cr. The assessee carried the matter before ld. CIT(A) who issued a notice through ITBA module on 08.11.2019 fixing date of hearing on 26.11.2019. Though as per ld. CIT(A)’s notice was duly served upon the appellant company on 15.11.2019 but on the given date i.e. 26.11.2019 the appellant company did not appear nor filed any petition seeking adjournment of the case. No further opportunity was given and vide order dated 02.12.2019, addition made by ld. AO was confirmed. 6. Before us, ld. Counsel for the assessee stated that due to the change of system of serving of notices, the assessee missed to take note of the notice received through e-mail and was prevented for sufficient cause from appearing before ld. CIT(A). Before us the detailed paper book containing 67 pages have been filed in order to explain the alleged sum of share capital and share premium. Perusal of the impugned order and records show that the assessee I.T.A. No.: 133/Kol/2020 Assessment Year: 2012-13 Royalpet Traders Pvt. Ltd. Page 4 of 4 was not granted proper opportunity of being heard. We therefore, considering the factual matrix and in the interest of justice, restore all the issues raised on merit to ld. CIT(A) for afresh adjudication and to pass a speaking order considering all the evidences and details filed before us and which would be filed by the assessee again on the very first date of hearing and adjournment should not be sought unless otherwise required for reasonable cause. Thus, all the grounds raised by the assessee are allowed for statistical purposes. 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. Kolkata, the 2 nd January, 2023 Sd/- Sd/- [Sanjay Garg] [Manish Borad] Judicial Member Accountant Member Dated: 02.01.2023 Bidhan (P.S.) Copy of the order forwarded to: 1. Royalpet Traders Pvt. Ltd., 1 st Floor, Room No. 107C, Todi Chamber, 2, Lalbazar Street, Kolkata-700 001. 2. ITO, Ward-4(1), Kolkata. 3. CIT(A)-10, Kolkata. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. True copy By order Assistant Registrar ITAT, Kolkata Benches Kolkata