M/s. Seven Hill Hardware Merchants (P) Ltd., , Kolkata V. ITO, Ward - 7(3), , Kolkata

ITA 2079/KOL/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 9545 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 03-10-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Bogus Share capital; Income from undisclosed sources
• Section: 68; 144; 142(1); 14A; 143(2)

Judgement Text

1. ITA No. 2079/Kol/2018 AY 2012-13 M/s. Seven Hill Hardware Merchants P.Ltd. आयकर अपील य अ धकरण, पीठ “A” , कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL BENCH “A”KOLKATA सम : ी मनीष बोरड, लेखा एवं ी संजय शमा या यक सद य Before: Shri Manish Borad, Accountant Member and Shri Sonjoy Sarma, Judicial Member आयकर अपील सं.य/ ITA No.2079/Kol/2018 Assessment Year: 2012-13 M/s. Seven Hill Hardware Merchants P.Ltd. 12 B.B Ganguly Street, Kolkata-700 069. बनाम V/s. Income Tax Officer, Ward 7(3), Aaykar Bhawan, P-7 Chowringhee Square, Kolkata-700 069. PAN: AAPCS3950D अपीलाथ /Appellant .. यथ /Respondent अपीलाथ क ओर से/By Appellant None यथ क ओर से/By Respondent Shri Vijay Kumar, Addl. Ld.CIT/DR स ु नवाई क तार ख/Date of Hearing 19-09-2022 घोषणा क तार ख/ Date of Pronouncement 30-09 -2022 आदेश /O R D E R PER MANISH BORAD, AM. This appeal of the assessee for the assessment year 2012-13 is directed against the order dt. 03-07-2018 passed u/s. 250(6) of the Income-tax Act, 1961 [ hereinafter, referred to as ‘the Act’] by the ld. 2. ITA No. 2079/Kol/2018 AY 2012-13 M/s. Seven Hill Hardware Merchants P.Ltd. Commissioner of Income-tax, Appeals [ in short, hereafter referred to as ‘the ‘ld. CIT(A)-18, 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 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 and adjournment application. 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:- 1. That under the facts & circumstances of the case, the Ld. CIT(A) erred in passing order ex-parte. 2. That under the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of a sum of Rs. 5,46,00,000/- under sec.68 of the Income Tax Act, 1961 for the share capital alongwith premium raised by the assessee during the year. The addition is whimsical, arbitrary, unjustified and hence need to be deleted. 3. That the appellant craves leave to add, alter, amend or withdraw any ground or grounds of appeal before or at the time 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 interest income and contractual business. Nil Income declared in return of income filed on 25.09.2012 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. But there was no compliance to the notices. AO, therefore, proceeded to frame 3. ITA No. 2079/Kol/2018 AY 2012-13 M/s. Seven Hill Hardware Merchants P.Ltd. best judgment assessment u/s. 144 of the Act. On examination of return/ ITR-6 for the AYs. 2011-12 & 2012-13 downloaded from ITD portal, the AO noticed that the assessee company was incorporated on 25.02.2011. On examination of balance sheet & entries in the return (ITR-6) the ld. AO found that the paid up capital of the assessee company is at Rs. 6,37,250/- and security premium is at Rs. 107,37,62,850/-. The ld. AO was not satisfied with the genuineness of share capital and share premium/security premium received by the assessee company. He accordingly completed/passed the best judgment assessment order u/s. 144 of the Act making addition u/s. 68 of the Act for unexplained share capital and security premium received during the year totalling to Rs. 107,43,00,000/- and also disallowed Rs.4,842/- u/s. 14A of the I.T Act, 1961. 5. Aggrieved, the assessee preferred appeal before the ld. CIT(A) challenging the impugned additions made u/s. 68 of the Act at Rs. 107,43,00,000/-. Apart from filing appeal, the assessee made no further efforts before the ld. CIT(A) to appear and 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 no other details are filed. Even Power of Attorney for appointment of authorised representative is also not filed. 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 4. ITA No. 2079/Kol/2018 AY 2012-13 M/s. Seven Hill Hardware Merchants P.Ltd. ld. DR vehemently argued supporting the orders of lower authorities and prayed for confirming the order of ld. CIT(A). 7. We have heard the Ld. Departmental Representative and perused the material placed on record before us. In the grounds of appeal the assessee has challenged the finding of the ld. CIT(A) confirming the addition made u/s. 68 of the Act at Rs. 5,46,00,000/- by the ld.AO for unexplained cash credits of share capital and security premium received during the year. However, on perusal of the assessment order as well as the impugned order, we find that the addition of Rs. 107.46 crs was made by the ld. AO u/s. 68 of the Act for the unexplained share capital and security premium. It seems that the assessee has mentioned wrong figure in the grounds of appeal inadvertently. Therefore, for the purpose of the adjudication we will consider the addition of Rs. 107.46 crs made u/s. 68 of the Act. We notice that the assessee company was incorporated on 25-02-2011 and had offered Nil income for the AY 2012- 13. Surprisingly the assessee company has been able to procure share capital at Rs. 6,37,250/- and security premium on this share capital at Rs.107,37,62,850/- during the year. Statutory notices u/s. 143(2) & 142(1) of the Act duly served upon the assessee and when the case of the assessee was selected for scrutiny the assessee company having such huge Capital and Security Premium Reserve failed to make any submissions/explanations before the ld.AO. Even after providing sufficient opportunity by ld.AO no submission was made either before the ld.AO nor before ld. CIT(A) and nor before us. The assessee was asked to explain the alleged cash credits of Rs. 107.43 cr. 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, 5. ITA No. 2079/Kol/2018 AY 2012-13 M/s. Seven Hill Hardware Merchants P.Ltd. creditworthiness of the shareholders as well as genuineness of the transaction. 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 totalling to Rs.107.43 cr. Therefore, the provisions of section 68 of the Act has rightly been invoked by ld. AO on the alleged transaction and it can be safely concluded that the assessee had unaccounted income, which has been routed in the books of account through bogus/accommodation entry in the form of share capital and security premium. We, therefore, under these facts and circumstances, find no infirmity in the finding of the ld. CIT(A) confirming the addition of Rs.107,43,00,000/- made u/s. 68 of the Act. Thus, all the grounds of appeal raised by the assessee are dismissed. प रणामत: नधा रती क अपील खा रज क जाती है। 8. In the result, the appeal of the assessee is dismissed. आदेश ख ु ले यायपीठ म दनांक ...-09-2022 को उ घो षत। The order pronounced in the open Court on 30.09.2022 Sd/- Sd/- ( SONJOY SARMA) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated :30 -09-2022 **PP/SPS 6. ITA No. 2079/Kol/2018 AY 2012-13 M/s. Seven Hill Hardware Merchants P.Ltd. आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1.अपीलाथ /Appellant/: M/s. Seven Hill Hardware Merchants P.Ltd. 12 B.B Ganguly Street, Kolkata-700 069. 2. यथ /Respondent/: Income Tax Officer, Ward 7(3), Aaykar Bhawan, P-7 Chowringhee Square, Kolkata-700 069. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त- अपील / CIT (A) 5. वभागीय त न ध, आयकर अपील य अ धकरण कोलकाता / DR, ITAT, Kolkata 6.गाड फाइल/Guardfile. By order/आदेश से, /True Copy/ Assistant Registrar ITAT, Kolkata