Singal Pipe Fittings Pvt. Ltd., , Howrah V. ITO, Ward - 13(4), Kolkata , Kolkata

ITA 1762/KOL/2018

AI Insights

The case involves Singal Pipe Fittings Pvt. Ltd., which appealed against the order of the CIT(A) confirming the addition of Rs.3,96,34,604 to its income for the Assessment Year 2012-13. The addition was made by the Assessing Officer under Section 68 of the Income Tax Act, 1961, due to doubts about the genuineness of the share capital and share premium received by the company. The CIT(A) and the Tribunal found that the company failed to prove the identity, creditworthiness, and genuineness of the share subscribers, and that the transactions appeared to be part of a bogus entry system.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 136127 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 14-12-2022
• Assessment Year: misc
• Appeal Filed On: 15-08-2018
• Other Referred Cases: CIT vs. N.R. Portfolio Pvt. Ltd. (2014) 2 ITR 68 (Delhi), CIT vs. Navodaya Castles Pvt. Ltd. (2014) 367 ITR 306 (Delhi)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Section: 68; 142(1); 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. 1762/Kol/2018 Assessment Year: 2012-13 Singal Pipe Fittings Pvt. Ltd. Tirupati Apartment 322, G.T. Road Kolkata - 711202 PAN : AAMCS1508C Vs I.T.O., Ward - 13(4), 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. 06/04/2018, passed u/s 250 of the Income Tax Act, 1961 (“the Act’), for Assessment Year 2012-13. 2. The assessee has taken eight (8) grounds of appeal. However, its substantial grievance is pleaded Ground No. 5, wherein it has been submitted that the ld. CIT(A) has erred in confirming the addition of Rs.3,96,34,604/-, which was added by the Assessing Officer on the ground that the assessee has received share capital and share premium which it failed to prove the genuineness of the transactions, creditworthiness of the applicants and identity of the share subscribers. In relation to the other grounds, the assessee has raised supporting arguments with the main ground. अपीलाथᱮ/ (Appellant) ᮧ᭜ यथᱮ/ (Respondent) Assessee by : None Revenue by : Smt. Ranu Biswas, Addl. CIT D/R I.T.A. No. 1762/Kol/2018 Assessment Year: 2012-13 Singal Pipe Fittings Pvt. Ltd. 2 3. Brief facts of the case are that the assessee has filed its return of income on 28/09/2012 declaring total income of Rs.57,316/-. The case of the assessee was selected for scrutiny assessment and notice u/s 143(2) of the Act was issued and served upon the assessee. Thereafter, the Assessing Officer had issued notice u/s 142(1) of the Act and directed the assessee to explain the identity, creditworthiness and genuineness of the transactions of fresh share application money amounting to Rs.3,96,34,604/-. The assessee did not reply to the notices issued by the Assessing Officer and accordingly an ex-parte assessment order was passed where addition of this amount has been made with the help of Section 68 of the Act. 4. Dissatisfied with this, the assessee carried the matter in appeal and its consultant appeared. She submitted the list of applicants who had subscribed the shares of the assessee. The ld. First Appellate Authority after making reference to a large number of decisions including CIT vs. N.R. Portfolio Pvt. Ltd. reported in (2014) 2 ITR 68 (Delhi) and CIT vs. Navodaya Castles Pvt. Ltd. reported in (2014) 367 ITR 306 (Delhi), and held that the assessee is engaged in providing of bogus entry system. It has not possessed any real financial worth. All the share applicants have received same kind of share capital as well as share premium that has been infused in the assessee. In other words, according to the ld. CIT(A) it is a circulated transaction. The ld. First Appellate Authority reproduced the details of share applicant company and how they have arranged the money and thereafter, the ld. First Appellate Authority has held that it is highly improbable that somebody would pay a premium of Rs.990/- for subscribing a Rs.10/- value share of such company which is not doing any business. I.T.A. No. 1762/Kol/2018 Assessment Year: 2012-13 Singal Pipe Fittings Pvt. Ltd. 3 5. In response to the notice of hearing, no one has come present. The notice issues through registered post has returned back unserved. On due consideration of the findings of the revenue authorities, we do not find any merit in this appeal because the assessee has failed to submit any requisite details exhibiting the identities of the share applicants, their creditworthiness and genuineness of the transactions. The ld. CIT(A) has rightly confirmed the addition and we uphold the same. Accordingly the appeal of the assessee is dismissed. 6. In the result, appeal of the assessee is dismissed. Order pronounced in the Court on 16 th December, 2022 at Kolkata. Sd/- Sd/- (GIRISH AGRAWAL) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE-PRESIDENT Kolkata, Dated 16/12/2022 *SC SrPs 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