M/s Ishved Exports (P) Ltd., Kolkata V. I.T.O.,Ward-9(3), Kolkata

ITA 1393/KOL/2019

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 8505 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 21-09-2022
• Assessment Year: misc
• Appeal Filed On: 05-06-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Rule 8D
• Section: 68; 143(3); 142(1); 14A; 133(6); 250; 143(2)

Judgement Text

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:1393 /कोल/ 2019 िनधा ª रण वष ª ः 2014-15 I.T.A. No.: 1393/Kol/2019 Assessment Year: 2014-15 M/s. Ishved Exports Pvt. Ltd....................................................Appellant [PAN: AAACI 6529 B] Vs. ITO, Ward-9(3), Kolkata.......................................................Respondent Appearances by: None appeared on behalf of the Assessee. Shri Vijay Kumar, Addl. CIT (Sr. DR) appeared on behalf of the Revenue. Date of concluding the hearing : September 22, 2022 Date of pronouncing the order : November 15, 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 28.03.2019 passed by the ld. Commissioner of Income-tax, Appeals [in short, hereinafter referred to as ‘the ‘ld. CIT(A)-15, Kolkata. 2. When the case was called for, none appeared on behalf of assessee. A perusal of file shows that number of notices of hearing was sent including few through RPAD, which have been returned unserved by the postal department. In this case, assessee has not filed any paper book or written submissions. It seems that assessee is 2 ITA No. 1393/Kol/2019 AY 2014-15 M/s. Ishved Exports (P) Ltd. not interested to pursue this appeal. We, therefore, deem it fit and 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 2014-15: “i. That the order passed by the ld. CIT(Appeals)-15, Kolkata u/s 250 confirming the addition and disallowance made by learned assessing officer is contrary to the law and facts of the case. ii. That the ld. CIT(A)-15 erred in law as well as on facts of the case by confirming the addition made by the ld. AO of Rs. 2,04,99,705/- u/s 68 of the I.T. Act, 1961 on account of share capital raised by the appellant-company by treating the same as unexplained cash credit. iii. That the ld. CIT(A)-15 erred in law as well as on facts of the case by confirming the addition of Rs. 1,09,718/- on account of disallowance made u/s 14A read with Rule 8D of the I.T. Act, 1961. iv. That the appellant craves to leave, add or amend any of the grounds during the course of appellant proceedings.” 4. Brief facts of the case are that the assessee is a private limited company. The return of income filed by the assessee on 17.09.2014 declaring total income of Rs. 31,307/- and same has been processed u/s 143(1). The case of the assessee was selected for scrutiny through CASS followed by serving of statutory notices u/s 143(2) & 142(1) upon the assessee. The ld. AO during the assessment proceeding observed that the assessee-company has received share capital of Rs. 28,23,490/- alongwith securities premium of Rs. 2,11,76,175/- from ten subscribers. During the assessment proceeding, the AO issued letters to the subscribers for the purpose of verification of source of their investment u/s 133(6) of the Act. In compliance to such notice, out of ten, nine investors did not mention the source of their investment neither attach any documentary evidence in support thereof. The ld. AO, therefore, completed/passed assessment u/s 143(3) of the Act by 3 ITA No. 1393/Kol/2019 AY 2014-15 M/s. Ishved Exports (P) Ltd. making the addition u/s 68 of the Act for unexplained cash credit of Rs. 2,04,99,705/-. Further, he disallowed expenses u/s 14A of the Act of Rs. 1,09,718/- and added to the income of the assessee and assessed the income of the assessee of Rs. 2,06,40,730/-. 5. Aggrieved, the assessee preferred appeal before the ld. CIT(A) challenging the impugned addition made u/s. 68 of the Act. Apart from filing the appeal before the ld. CIT(A), the assessee made no further efforts before the ld. CIT(A) nor file any documentary evidence in support of its claim. As the assessee failed to do so, ld. CIT(A) confirmed the addition made by the AO. 6. Dissatisfied with the above order, the assessee is in appeal before this Tribunal. However, the assessee again failed to appear before us on the dates of hearing except filing this appeal before us. From the conduct of the assessee, it is clearly indicates that the assessee is only trying to delay the proceedings and has nothing to placed on record. On the other hand, the ld. DR vehemently argued supporting the order of lower authorities and prayed for confirming the order of ld. CIT(A). 7. We have heard 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. 2,04,99,705/-/- by the ld. AO for unexplained cash credits of share capital and security premium received during the year. We noticed that the assessee company had offered income of Rs. 31,307/- for assessment year in question. During the course of assessment proceeding, assessee had 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 4 ITA No. 1393/Kol/2019 AY 2014-15 M/s. Ishved Exports (P) Ltd. 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. From the facts of the case, it is clear that the assessee-company has miserably failed to explain the source of alleged cash credit. If the assessee has sufficient details to explain alleged sum, it could have certainly filed those details before the authorities below. The assessee consistently escaping from appearing before the ld. AO as well as before the ld. CIT(A). It 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. 8. Therefore, under these facts and circumstances, we find no infirmity in the finding of the ld. CIT(A) confirming the addition of Rs. 2,04,99,705/- made u/s. 68 of the Act and the same is confirmed. Thus, instant grounds of appeal raised by the assessee are dismissed. 9. The another issue raised by the assessee in this appeal in respect of addition of Rs. 1,09,718/- by the AO by disallowing expenses u/s 14A of the Act and same has been upheld by the ld. CIT(A) since the assessee did not make any efforts before the ld. CIT(A) and did not file any documentary evidence in support of its claim. We after perusing the 5 ITA No. 1393/Kol/2019 AY 2014-15 M/s. Ishved Exports (P) Ltd. material available on record and findings of the authorities below in respect of addition made by the AO by disallowing Rs. 1,09,718/- u/s 14A of the Act and same has been upheld by the ld. CIT(A) in his appellate order. We are of the considered view that since the assessee could not demonstrate any irregularity in the order passed by the AO to substantiate its claim before the ld. CIT(A) and even before us also. Since the assessee completely failed to substantiate its claim before the authorities below, therefore, we find no infirmity in the findings of the ld. CIT(A) on this issue and thus ground no. 3 is also dismissed. The other grounds raised by the assessee are general and consequential in nature therefore need not required to be adjudicated. 10. In the result, the appeal of the assessee is dismissed. Order pronounced in the open Court on 15.11.2022 Sd/- Sd/- (MANISH BORAD) (SONJOY SARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 15.11.2022 Biswajit, Sr. P.S. आदेशकȧĤǓतͧलͪपअĒेͪषत / Copy of Order Forwarded to:- 1.अपीलाथȸ/Appellant/: M/s. Ishved Exports (P) Ltd. 160, M.G. Road, Burrabazar, Kolkata-700007. 2. Ĥ×यथȸ/Respondent/: Income Tax Officer, Ward 9(3), Kolkata. 3. संबंͬधतआयकरआय ु Èत/ Concerned CIT 4.आयकरआय ु Èत- अपील / CIT (A) 5. ͪवभागीयĤǓतǓनͬध,आयकरअपीलȣयअͬधकरणकोलकाता / DR, ITAT, Kolkata 6.गाड[फाइल/ Guard file. True Copy/ By order Assistant Registrar ITAT, Kolkata Benches, Kolkata