Genesis Trade Links(P)Ltd, Kolkata V. ITO, Kolkata

ITA 332/KOL/2023

AI Insights

Genesis Trade Links (P) Ltd. appealed against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi, which confirmed the addition of Rs. 10,48,96,895/- to the assessee's income as unexplained cash credit under section 68 of the Income Tax Act. The addition was initially made by the AO based on the assessee's return, which erroneously reported an increase in share capital and share premium. The Tribunal noted that the assessee had not actually issued any share capital or received any share premium during the year, as confirmed by the audited balance sheet. The Tribunal criticized both the AO and the CIT(A) for failing to appreciate the factual position and for not considering the documents provided by the assessee.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127292 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 09-04-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Set aside
• Section: 142(1)

Judgement Text

आयकर अपील य अ धकरण, कोलकाता पीठ ‘‘बी’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH: KOLKATA ी राजेश क ु मार, लेखा सद य एवं ी संजय शमा या यक सद य के सम [Before Shri Rajesh Kumar, Accountant Member & Shri Sonjoy Sarma, Judicial Member] I.T.A. No. 332/Kol/2023 Assessment Year: 2014-15 Genesis Trade Links (P) Ltd. (PAN: AACCG 4903 H) Vs. ITO, Ward-2(2), Kolkata Appellant / (अपीलाथ ) Respondent / ( !यथ ) Date of Hearing / स ु नवाई क$ त&थ 25.05.2023 Date of Pronouncement/ आदेश उ)घोषणा क$ त&थ 21.08.2023 For the Appellant/ नधा /रती क$ ओर से Shri Miraj D Shah, A.R For the Respondent/ राज व क$ ओर से Shri Rakesh Kumar Das, CITDR ORDER / आदेश Per Rajesh Kumar, AM: This is the appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeal)-NFAC, Delhi (hereinafter referred to as the Ld. CIT(A)”] dated 15.11.2022 for the AY 2014-15. 2. The only issue raised by the assessee in the various ground of appeal is against the confirmation of addition of Rs. 10,48,96,895/- by the Ld. CIT(A) as made by the AO on account of share capital and share premium being unexplained cash credit u/s 68 of the Act. 3. Facts in brief are that the assessee filed return of income on 18.10.2014 declaring total loss at Rs. 14,701/-.Thereafter the case was selected for scrutiny for 2 I.T.A. No. 332/Kol/2023 Assessment Year: 2014-15 Genesis Trade Links (P) Ltd.. large share premium and share capital and statutory notices were duly issued and served on the assessee. The AO issued questionnaire to the assessee along with notice u/s 142(1) of the Act and the assesse accordingly filed written submission along with necessary documents before the AO. The assesse submitted before the AO that assesse has not any share capital and share premium during the year however the return of income filed for the year states that the assesse had received share capital and share premium to the tune of Rs. 10,48,96,895/-. Finally, the AO added a sum of Rs. 10,48,96,895/- on account of share capital/premium received as unexplained cash credit to the income of the assesse when the failed to reply to the various notices issued or record personal appearance. 4. The issue was challenged before the Ld. CIT(A) however the Ld. CIT(A) also dismissed the appeal in liminie after assesse failed to appear despite 4 opportunities. 5. We have perused the facts on record and heard the rival contentions. We note that the assesse has not issued any share capital during the year and this fact was also placed before the ld AO by means of written submissions dated 2423.08.2016 notwithstanding the assesse has shown in the return of income the increase in share premium and share capital. It was pointed out that while uploading the return of income due to wrong tagging , the said mistake has happened. We have also examined the audited balance Sheet as at 31.03.2014 dated 22.08.2014 and observe that the share capital as on 31.3.2014 vis-a-vis 31.3.2013 was same and there was no increase in share capital and share premium. The ld CIT(A) dismissed the appeal in liminie on account of appeal not attended by anyone on behalf of the assesse. Similarly, the AO has ignored the documents filed to arrive at a correct conclusion on the issue of share capital and share premium whereas there has been no such issue of share at a premium during the year. We also note that the fact is apparent from the balance sheet of the assessee is also reproduced as under for ready reference: 3 I.T.A. No. 332/Kol/2023 Assessment Year: 2014-15 Genesis Trade Links (P) Ltd.. 4 I.T.A. No. 332/Kol/2023 Assessment Year: 2014-15 Genesis Trade Links (P) Ltd.. 5 I.T.A. No. 332/Kol/2023 Assessment Year: 2014-15 Genesis Trade Links (P) Ltd.. In our opinion both the authorities below hopelessly failed to appreciate the facts on record that the assessee has not issued any share capital or received any premium during the year. We are not sending the case to the file of Ld. CIT(A) as the facts are apparent on record and in case, we do so, it would lead to wastage of time and resources of the revenue. Since the case is apparent that there has been no issuance of share capital during the year, we are inclined to set aside the order of Ld. CIT(A) and direct the AO to delete the addition of Rs. 10,48,96,895/- 6. In the result, the appeal of the assessee is allowed. Order is pronounced in the open court on 21 st August, 2023 Sd/- Sd/- (Sonjoy Sarma /संजय शमा ) (Rajesh Kumar/राजेश क ु मार) Judicial Member/ या यक सद य Accountant Member/लेखा सद य Dated: 21 st August , 2023 SB, Sr. PS Copy of the order forwarded to: 1. Appellant- M/s Genesis Trade Links Pvt. Ltd., R Singh & Associates, Room no. 215, 2 nd Floor, Hastings Chambers, 7C, Kiran Shankar Roy Road, Kolkata- 700001. 2. Respondent – ITO, Ward-2(2), Kolkata 3. Ld. CIT(A)-NFAC, Delhi 4. Ld. PCIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata