Kamakahya Advisory Services Private Limited, Ahmedabad V. The Income Tax Officer, Ward-2(1)(2), Ahmedabad

ITA 3340/AHD/2016

AI Insights

The case involves Kamakahya Advisory Services Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals) -2, Ahmedabad, concerning an assessment order under section 143(3) of the Income Tax Act, 1961 for the Assessment Year 2012-13. The primary issue was the dismissal of the assessee's appeal due to a 10-day delay, which was not adequately explained, and the merits of the case concerning the addition of share capital raised as unexplained cash credit under section 68 of the Act. The Tribunal considered a precedent from the Supreme Court, which influenced their decision to condone the delay and remand the case for a thorough examination on merits.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114189 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-03-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 12-12-2016
• Other Referred Cases: Anil Kumar Nehru Vs. Assistant Commissioner of Income Tax, Mumbai
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Set aside
• Section: 68; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH Before: Smt. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member Kamakahya Advisory Services Pvt. Ltd. Room No. 9, Ankini House, Opp. Usmanpura Garden, Ahmedabad PAN: AAECK4844R (Appellant) Vs The Income Tax Officer, Ward-2(1)(2), Ahmedabad (Respondent) Assessee Represented: Shri P.D. Shah, A.R. Revenue Represented: Shri Sudhendu Das, CIT-DR Date of hearing : 06-03-2023 Date of pronouncement : 29-03-2023 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the Appellate order dated 19.09.2016 passed by the Commissioner of Income Tax(Appeals)-2, Ahmedabad arising out of the Assessment order passed under section 143(3)of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year (A.Y) 2012-13. ITA No. 3340/Ahd/2016 Assessment Year 2012-13 I.T.A No. 3340/Ahd/2016 A.Y. 2012-13 Page No Kamakahya Advisory Services Pvt. Ltd. vs. ITO 2 2. The limited grievance of the assessee is that the Ld. CIT(A) dismissed the appeal wherein the appeal is filed belatedly by 10 days for which no application for condonation has been filed by the assessee. The Ld. CIT(A) also dealt on the merits of the case namely addition of share capital raised of Rs.40,00,00,000/- as unexplained cash credit under section 68 of the Act. 2.1. The brief facts of the case is that the assessee is newly incorporated company have issued 50,500 shares during the Assessment Year 2012-13 and has share capital of Rs. 5,01,000/-. The assessee company allotted 40000 of a face value of Rs. 10/- and on premium of Rs. 9990/- per share, i.e. for a total value of Rs. 10000/- per share to M/s. Deserve Financial Consultants Pvt. Ltd. (DFCL). 2.2. The assessee company also allotted 5000/- shares each to Mahamaya Financial Construction Pvt. Ltd. and Dhanvarsha Advisory Service Pvt. Ltd. of a face value of Rs. 10/- without any premium amount. The assesse could not justify the collection of share premium of 9990/- per share to M/s. DFCL. Hence notice under section 133(6) of the Act was issued to M/s. Deserve Financial Consultants Pvt. Ltd. on 24.11.2014 on the address available in the submission made by the assessee company, which is the same address mentioned in the Return of Income by M/s. DFCL. However the said notice was returned un-served with the postal remark “Not Known”. I.T.A No. 3340/Ahd/2016 A.Y. 2012-13 Page No Kamakahya Advisory Services Pvt. Ltd. vs. ITO 3 2.3. Further opportunities was given to the assessee to establish the share premium amount however no proper evidence have been filed by the assessee. The assessee company has failed to offer any satisfactory explanation of credits in the name of the share application money received from M/s. Deserve Financial Consultants Pvt. Ltd. According the sum of Rs. 40,00,00,000/- stand unexplained cash credit as per Section 68 of the Act and added as the total income of the assessee company. 3. Aggrieved against the same, the assessee filed an appeal before the Ld. CIT(A)-2, Ahmedabad who dismissed the assessee appeal on the point of delay of 10 days not properly explained by the assessee and also on merits, confirmed the additions made by the Assessing Officer. 4. Aggrieved against the same, the assessee is in appeal before us. During the course of the appellate proceedings, the Ld. Counsel submitted before us Hon’ble Supreme Court judgment in Civil Appeal No. 11750/2018 dated 03.12.2018 in the case of Anil Kumar Nehru Vs. Assistant Commissioner of Income Tax, Mumbai wherein the Hon’ble Supreme Court held that the High Court should not have taken a technical view of dismissing the appeal on the ground of delay, when it has to decide the question of law between the parties in respect of earlier assessment year. Thus the Hon’ble Supreme Court set aside the order of the High Court, condoned the delay for filing the appeal and directed to decide the appeal on merits. I.T.A No. 3340/Ahd/2016 A.Y. 2012-13 Page No Kamakahya Advisory Services Pvt. Ltd. vs. ITO 4 4.1. Praying in similar ground, the Ld. Counsel pleaded to condone the delay of 10 days in filing the appeal, since the Director who’s signing the appeal paper was not a resident of Ahmedabad and traveling always. Thus there is delay of 10 days which is to be condoned. On merits of the case, the Ld. A.R. Submitted that there were assessments in the hands of M/s. Deserve Financial Consultants Pvt. Ltd. wherein similar addition of Rs.40,01,00,000/- was made by the Assessing Officer which was confirmed by Ld. Commissioner of Income Tax(Appeals)-16, Kolkata. The assessee counsel further pleaded that there are enough materials to substantiate its case before the Ld. CIT(A). Hence one more opportunity be given to the assessee to make out its case. 5. Per contra, the Ld. D.R. appearing for the Revenue has no serious objection in remanding the matter back to the file of the Ld. CIT(A) for adjudicating the case on merits. 6. Considering the above submissions of the rival parties, we hereby set aside the order passed by Ld. CIT(A) and condone the delay of 10 days in filing the appeal by the assessee. Further we set aside the case back to the file of the Ld. CIT(A) to adjudicate the case on merits after giving opportunity to the assessee. Needless to say, the assessee should make use of this final opportunity and place all material evidences before the Ld. CIT(A) to adjudicate the case on merits. With this observation, the appeal filed by the assessee is allowed for statistical purpose. I.T.A No. 3340/Ahd/2016 A.Y. 2012-13 Page No Kamakahya Advisory Services Pvt. Ltd. vs. ITO 5 7. In the result, the appeal filed by the Assessee is allowed for statistical purpose. Order pronounced in the open court on 29 -03-2023 Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 29/03/2023 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद