Shreejee Aptex P.Ltd, New Delhi V. Income Tax Officer, New Delhi

ITA 707/DEL/2022

AI Insights

The case involves Shreejee Aptex P. Ltd., the appellant, contesting an addition of Rs.23,79,000 to their income under Section 68 of the Income-Tax Act, 1961, for the assessment year 2010-11. The addition was initially made by the Assessing Officer due to the assessee's failure to provide bank statements of the entities from whom they received share capital. The Commissioner of Income-Tax (Appeals) upheld this addition. The appellant argued that the Assessing Officer and the Commissioner did not conduct an independent inquiry and merely relied on the absence of bank statements. The Departmental Representative suggested restoring the issue to the Assessing Officer for fresh adjudication.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 300779 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 26-03-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 18-04-2022
• Laws Referred To: Income-Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Section: 131; 68; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘SMC’ NEW DELHI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA No. 707/Del/2022 Assessment Year: 2010-11 Shreejee Aptex P. Ltd., C/o. Viney Pandey & Co., CAs, 215-A Second Floor, D-288/10, Wadhwa Complex, Near Laxmi Nagar Metro Station Gate No.1, Laxmi Nagar, New Delhi Vs. ITO, Ward-8(3), Panipat. PAN :AAHCS1262N (Appellant) (Respondent) ORDER This is an appeal by the assessee against order dated 12.06.2014 of learned Commissioner of Income-Tax (Appeals)-XI, New Delhi pertaining to assessment year 2010-11. Appellant by Shri Sachin Jain, CA Respondent by Shri D.K. Shrivastav, Sr. DR Date of hearing 27.03.2023 Date of pronouncement 31.03.2023 2 ITA No.707/Del./2022 2. The dispute in the present appeal is confined to addition of Rs.23,79,000 made under Section 68 of the Income-Tax Act,1961. 3. Briefly, the facts are, the assessee is a resident corporate entity. For the assessment year under dispute, assessee filed its return of income on 15.10.2010 declaring income of Rs.10,30,932. 4. In course of assessment proceedings, the Assessing Officer, while examining the audit report, noticed that in the year under consideration, the assessee had received share capital amounting to Rs.12,50,000 from M/s. Nepostel India Pvt. Ltd. and Rs.11,29,000 from M/s. Chinu Press & Prakash Pvt. Ltd. Alleging that the assessee could not furnish the bank statement of the concerned persons/entities, the Assessing Officer treated the aggregate amount of Rs.23,79,000 as unexplained cash credit under Section 68 of the Act and added to the income of the assessee. Assessee contested the aforesaid addition before learned Commissioner (Appeals). However, learned Commissioner (Appeals) sustained the addition. 5. Before me, learned counsel appearing for the assessee submitted that in course of assessment proceedings itself, the assessee had requested the Assessing Officer to issue summons to M/s. Nepostel 3 ITA No.707/Del./2022 India Pvt. Ltd. and M/s. Chinu Press & Prakash Pvt. Ltd. as the concerned entities were not cooperating with the assessee. He submitted, neither the Assessing Officer nor learned Commissioner (Appeals) conducted ay independent inquiry with M/s. Nepostel India Pvt. Ltd. and M/s. Chinu Press & Prakash Pvt. Ltd. and made the addition simply because the assessee could not furnish the bank statement of the concerned entities. He submitted, M/s. Nepostel India Pvt. Ltd. and M/s. Chinu Press & Prakash Pvt. Ltd. are still active as per the status available in Ministry of Corporate Affair’s record. He submitted, the assessee had allotted shares to the concerned entities. Thus, he submitted, a direction may be issued to the Assessing Officer to conduct necessary inquiry with the concerned entities. 6. Learned Departmental Representative submitted, issue can be restored back to the Assessing Officer for fresh adjudication. 7. I have considered rival submissions and perused the material available on record. 8. Undisputedly, the assessee had received aggregate amount of Rs.23,79,000 towards investment in share capital from M/s. Nepostel India Pvt. Ltd. and M/s. Chinu Press & Prakash Pvt. Ltd. It is 4 ITA No.707/Del./2022 observed from Form 23 filed by the assessee before the Registrar of Companies (ROC), the assessee had issued shares to M/s. Nepostel India Pvt. Ltd. and M/s. Chinu Press & Prakash Pvt. Ltd. during the financial year 2010-11. Further, from the MCA data filed in the paper books, it is observed that the status of these companies have been shown as active as on 31.03.2022, the balance sheet date. It is further observed, in course of assessment proceedings itself, the assessee had requested the Assessing Officer to issue summons under Section 131 of the Act to the parties as they were not cooperating with the assessee. It appears, the Assessing Officer has neither acceded to the request of the assessee nor has himself conducted, even, preliminary inquiry by issuing notice under Section 133(6) of the Act. Merely because, the assessee was unable to produce the bank statements of M/s. Nepostel India Pvt. Ltd. and M/s. Chinu Press & Prakash Pvt. Ltd., for that reasoning alone, the share capital cannot be added under Section 68 of the Act. Since, the departmental authorities, particularly, the Assessing Officer have failed to carry out the necessary inquiry, I deem it appropriate to restore the issue to the Assessing Officer for fresh examination after conducting necessary inquiry with M/s. 5 ITA No.707/Del./2022 Nepostel India Pvt. Ltd. and M/s. Chinu Press & Prakash Pvt. Ltd. with regard to the investments made in share capital. 9. Needless to mention, before deciding the issue the Assessing Officer must afford reasonable opportunity of being heard to the assessee. 10. Grounds are allowed for statistical purposes. 11. In the result, the appeal is allowed for statistical purposes. Order pronounced in the open court on31st March, 2023. Sd/- (SAKTIJIT DEY) JUDICIAL MEMBER Dated: 31 st March, 2023. Mohan Lal Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi