SHREEPUNJ CONSTRUCTION PVT LTD, BEGUSARAI V. ITO, WARD-2(2), BEGUSARAI

ITA 217/PAT/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6603 (ITAT-PATNA)
• Duration Of Justice: 2 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 20-08-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Opportunity of being heard; Additional evidence
• Section: 68; 143(3); 20

Judgement Text

ITA NO.217/PAT/2019 A.Y. 20 15-2016 SHREEPUNJ C ONSTRUCTION PVT. LTD., BEGUSARAI 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA-PATNA E-COURT, KOLKATA [VIRTUAL COURT HEARING] BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT(KZ) I.T.A. NO. 217/PAT/2019 ASSESSMENT YEAR: 2015-2016 SHREEPUNJ CONSTRUCTION PVT. LIMITED,............... ...................APPELLANT BARAUNI 41 TOLA RASALPUR, P.O. BARAUNI DYODHI, P.S. TEGHRA, BARAUNI, BEGUSARAI-851113 [PAN: AAVCS2997L] -VS.- INCOME TAX OFFICER,................................ ...............................RESPONDENT WARD-2(2), BEGUSARAI APPEARANCES BY: SHRI D.V. PATHY, ADVOCATE, FOR THE APPELLANT SHRI AJAY KUMAR, JCIT, SR. D.R., FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : SEPTEMBER 08, 202 1 DATE OF PRONOUNCING THE ORDER : SEPTEMBER 08, 2021 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), BHAGALPUR DAT ED 12.06.2019 AND THE SOLITARY ISSUE INVOLVED THEREIN RELATES TO THE ADDITION OF RS.10,00,000/- MADE BY THE ASSESSING OFFICER AND CO NFIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF SHARE CAPITAL RECEIVED B Y THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION BY TREATING THE SAME A S UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 . 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION O N 31.03.2017 DECLARING A LOSS OF RS.7,650/-. DURING THE YEAR UND ER CONSIDERATION, SHARE CAPITAL OF RS.10,00,000/- WAS RAISED BY THE ASSESSE E AND THE SAME WAS STATED TO BE CONTRIBUTED BY SHRI SHYAM KISHORE SING H AND SHRI KRISHNA KUMAR TO THE TUNE OF RS.5,00,000/- EACH. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSEE-COMPANY COULD NOT ESTABLISH THE ITA NO.217/PAT/2019 A.Y. 20 15-2016 SHREEPUNJ C ONSTRUCTION PVT. LTD., BEGUSARAI 2 CREDITWORTHINESS OF THE SHARE SHAREHOLDERS NAMELY S HRI SHYAM KISHORE SINGH AND SHRI KRISHNA KUMAR, WHO INVESTED RS.5,00, 000/- EACH IN THE SHARE CAPITAL. AS FURTHER NOTED BY THE ASSESSING OF FICER, THE SAID SHARE CAPITAL WAS CLAIMED TO BE RECEIVED BY THE ASSESSEE- COMPANY IN CASH. HE, THEREFORE, TREATED THE ENTIRE SHARE CAPITAL OF RS.1 0,00,000/- RECEIVED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION AS UNEXPLAINED AND AN ADDITION TO THAT EXTENT WAS MADE BY HIM TO THE TOTA L INCOME OF THE ASSESSEE UNDER SECTION 68 OF THE ACT IN THE ASSESSM ENT COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 19.12.2017. 3. ON APPEAL, THE LD. CIT(APPEALS) CONFIRMED THE SA ID ADDITION MADE BY THE ASSESSING OFFICER OBSERVING THAT THE ONUS LA Y UPON THE ASSESSEE TO EXPLAIN THE RELEVANT CASH CREDITS IN THE FORM OF SH ARE CAPITAL RECEIVED DURING THE YEAR UNDER CONSIDERATION IN TERMS OF SEC TION 68 WAS NOT SATISFACTORILY DISCHARGED BY THE ASSESSEE. AGGRIEVE D BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS A PPEAL BEFORE THE TRIBUNAL. 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS REGARDS T HE SHARE CAPITAL OF RS.5,00,000/- CONTRIBUTED BY SHRI KRISHNA KUMAR, TH E LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE INVESTMENT IN THE S HARE CAPITAL OF THE ASSESSEE-COMPANY WAS MADE BY THE SAID SHAREHOLDER I N CASH FROM HIS PAST ACCUMULATED SAVINGS. HE, HOWEVER, HAS NOT BEEN ABLE TO BRING ANY EVIDENCE ON RECORD TO SUPPORT AND SUBSTANTIATE HIS EXPLANATION. THERE IS ALSO NOTHING BROUGHT ON RECORD TO SHOW THAT SHRI KR ISHNA KUMAR IS REGULARLY ASSESSED TO INCOME-TAX AND THE INVESTMENT MADE BY HIM IN THE SHARE CAPITAL OF THE ASSESSEE-COMPANY WAS DULY REFL ECTED IN THIS FINANCIAL STATEMENT. I, THEREFORE, FIND NO JUSTIFIABLE REASON TO INTERFERE WITH THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) CONFIRMING T HE ADDITION OF RS.5,00,000/- MADE BY THE ASSESSING OFFICER UNDER S ECTION 68 BY TREATING ITA NO.217/PAT/2019 A.Y. 20 15-2016 SHREEPUNJ C ONSTRUCTION PVT. LTD., BEGUSARAI 3 THE SHARE CAPITAL OF RS.5,00,000/- CLAIMED TO BE RE CEIVED BY THE ASSESSEE- COMPANY FROM SHRI KRISHNA KUMAR AS UNEXPLAINED. 5. AS REGARDS THE SHARE CAPITAL OF RS.5,00,000/- CO NTRIBUTED BY SHRI SHYAM KISHORE SINGH, THE LD. COUNSEL FOR THE ASSESS EE HAS FILED BEFORE THE TRIBUNAL TWO AGREEMENTS FOR SALE OF AGRICULTURAL LA ND BY SHRI SHYAM KISHORE SINGH ON 14.10.2014 FOR RS.1,99,000/- AND R S.6,92,000/-. HE HAS CONTENDED THAT THE AMOUNTS OF SALE CONSIDERATION RE CEIVED BY SHRI SHYAM KISHORE SINGH IN CASH WERE INVESTED IN THE SHARE CA PITAL OF RS.5,00,000/- OF THE ASSESSEE-COMPANY. SINCE THESE AGREEMENTS FIL ED BY THE ASSESSEE- COMPANY FOR THE FIRST TIME BEFORE THE TRIBUNAL CONS TITUTE ADDITIONAL EVIDENCE, WHICH IS RELEVANT TO DECIDE THE ISSUE INV OLVED IN THIS CASE, I HAVE ADMITTED THE SAME. AS RIGHTLY CONTENDED BY THE LD. D.R. SINCE THIS EVIDENCE WAS NOT FILED BY THE ASSESSEE EITHER BEFOR E THE ASSESSING OFFICER OR BEFORE THE LD. CIT(APPEALS), AN OPPORTUNITY IS R EQUIRED TO BE GIVEN TO THE ASSESSING OFFICER TO VERIFY THE SAME. KEEPING I N VIEW ALL THE RELEVANT FACTS OF THE CASE, I RESTORE THIS ISSUE RELATING TO THE ADDITION MADE UNDER SECTION 68 ON ACCOUNT OF SHARE CAPITAL CONTRIBUTED BY SHRI SHYAM KISHORE SINGH AMOUNTING TO RS.5,00,000/- TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH AFTER VERIFYING THE ADDITI ONAL EVIDENCE FILED BY THE ASSESSEE IN THE FORM OF TWO AGREEMENTS FOR SALE OF AGRICULTURAL LAND, THE CONSIDERATION OF WHICH RECEIVED IN CASH IS CLAI MED TO BE UTILIZED FOR MAKING INVESTMENT IN THE SHARE CAPITAL OF THE ASSES SEE-COMPANY. NEEDLESS TO SAY THAT THE ASSESSING OFFICER SHALL AFFORD PROP ER AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE D ECIDING THE ISSUE AFRESH AFTER VERIFYING THE ADDITIONAL EVIDENCE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON SEPTEMBER 08, 2021. S D/- (P.M. JAGTAP) VICE-PRESI DENT KOLKATA, THE 8 TH DAY OF SEPTEMBER, 2021 ITA NO.217/PAT/2019 A.Y. 20 15-2016 SHREEPUNJ C ONSTRUCTION PVT. LTD., BEGUSARAI 4 COPIES TO : (1) SHREEPUNJ CONSTRUCTION PVT. LIMITED, BARAUNI 41 TOLA RASALPUR, P.O. BARAUNI DYODHI, P.S. TEGHRA, BARAUNI, BEGUSARAI-851113 (2) INCOME TAX OFFICER, WARD-2(2), BEGUSARAI (3) COMMISSIONER OF INCOME TAX (APPEALS), BHAGALP UR, (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER SENIOR PRIV ATE SECRETARY/DDO INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.