Srilakshmi Finvest Pvt. Ltd., , Kolkata V. ITO, Ward - 5(1) , Kolkata

ITA 73/KOL/2019

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 8720 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Next Hearing Date: 20-09-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 14-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Income from undisclosed sources; Set aside
• Section: 131; 68; 143(3); 142(1); 14A; 143(2); 73

Judgement Text

1. ITA No. 73/Kol/2019 AY 2012-13 M/s. Srilakshmi Finvest Pvt. Ltd. आ यकर अपीलीय अिधकरण कोलकाता 'ए' पीठ, कोलकाता म ¤ IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘A’ BENCH, KOLKATA डॉ मनीष बोरड, ल े खा सदÖय एवं ®ी संजय शमा ª , Æयाियक सदÖय क े सम± Before DR. MANISH BORAD, ACCOUNTANT MEMBER & SONJOY SARMA, JUDICIAL MEMBER आयकर अपील सं ́या: 73 /कोल/ 2019 िनधा ª रण वष ª ः 2012-13 I.T.A. No.: 73/Kol/2019 Assessment Year: 2012-13 M/s. Srilakshmi Finvest Pvt. Ltd.............................................Appellant [PAN: AAECS 4012 R] Vs. ITO, Ward-5(1), Kolkata.......................................................Respondent Appearances by: None appeared on behalf of the Assessee. Md. Ghayasuddin, CIT (DR) appeared on behalf of the Revenue. Date of concluding the hearing : September 21, 2022 Date of pronouncing the order : November 10, 2022 आदेश /O R D E R PER SONJOY SARMA, JUDICIAL MEMBER: This appeal of the assessee for the assessment year 2012-13 is directed against the order dated 30.10.2018 passed by the ld. Commissioner of Income-tax, Appeals [in short, hereinafter referred to as ‘the ‘ld. CIT(A)-10, 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 was sent including few through RP/AD, which have been returned 2. ITA No. 73/Kol/2019 AY 2012-13 M/s. Srilakshmi Finvest Pvt. Ltd. unserved by the postal department. Asessee has not filed any paper book or written submissions. 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:- “i. For that on the facts and in the circumstances of the case, the addition of Rs. 8,57,50,000/- made u/s 68 was factually as well as legally unsustainable and therefore the same deserves to be deleted. ii. For that on the facts and in the circumstances of the case, the authorities below were unjustified in no appreciating that the assessee had duly discharged ins onus of establishing the identity, genuineness & creditworthiness of the share subscribers and in the view of the matter the addition of Rs. 8,57,50,000/- made by way of unexplained cash credit u/s 68 was untenable on facts and in law. iii. For that on the facts and in the circumstances of the case, the order of the CIT(A) without dealing with the grounds of appeal relating to disallowance u/s 14A on merits be held unsustainable and be therefore cancelled and/or set aside. iv. For that on the facts and in the circumstances of the case, the disallowance of Rs. 69,519/- made u/s 14A of the Act was untenable on facts and in law and the same deserves to be deleted in full. v. For that the appellant craves leave to submit additional grounds and/or amend or alter the grounds already taken either at the time of hearing of the appeal or before. 4. Brief facts of the case are that the assessee is a private limited company. The source of income is stated to be from investment in shares. Income at Rs. Nil declared in e-return of income filed on 26.03.2013 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. No one appeared before the ld. AO and did not produce the copies of books of account, audited accounts and other relevant details/documents in support of return as filed. The ld. AO observed that the assessee 3. ITA No. 73/Kol/2019 AY 2012-13 M/s. Srilakshmi Finvest Pvt. Ltd. company has received an amount of Rs. 8,57,50,000/- which includes share allotment money and security premium of Rs. 17,15,000/- + Rs. 8,40,35,000/- respectively. Thereafter, the ld. AO issued notices u/s. 131 of the Act to appear personally along with relevant details/documents for examination/verification of (i) identity (ii) existence/identity/sources of funds and creditworthiness (iii) genuineness of the transaction. But the alleged creditors who have subscribed the amounts in the assessee company did not appear before the ld.AO for the same and remained non-compliance. Therefore, the ld. AO proceeded to frame the assessment u/s. 143(3) of the Act on the basis of as material available before him. The ld. AO was not satisfied with the identity, creditworthiness and genuineness of said transaction of Rs. 8,57,50,000/- received by the assessee company from the alleged subscribers/creditors. He accordingly completed/passed the assessment u/s. 143(3)/144 of the Act making addition u/s. 68 of the Act for unexplained cash credit of Rs. 8,57,50,000/- and disallowance u/s 14A of Rs. 69,519/- and assessed assessee’s income at Rs. 8,58,16,170/-. 5. Aggrieved, the assessee preferred appeal before the ld. CIT(A) challenging the impugned addition made u/s. 68 of the Act at Rs. 8,58,16,170/-. Apart from filing appeal, the assessee made no further efforts before the ld. CIT(A) did not 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 before us. It clearly indicates that the assessee is only trying to delay the proceeding and has nothing to place 4. ITA No. 73/Kol/2019 AY 2012-13 M/s. Srilakshmi Finvest Pvt. Ltd. on record. On the other hand, the 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. DR and perused the material placed on record before us. The assessee has challenged the finding of the ld. CIT(A) confirming the addition made u/s. 68 of the Act at Rs. 8,58,16,170/- by the ld. AO for unexplained cash credits of share capital and security premium received during the year in ground no. 1 & 2 respectively. We notice that the assessee company did not offer any income for AY 2012-13. The assessee company has been able to procure share capital/share premium at Rs. 8,58,16,170/-. Statutory notice u/s. 131 of the Act duly served upon the alleged directors but none complied. Assessee failed to produce the alleged shareholders before the ld. AO for identity, creditworthiness and genuineness of the transaction. Even after providing sufficient opportunity no submission was made either before the ld. AO and ld. CIT(A) nor before us in this regard. The assessee was asked to explain the cash credits 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, creditworthiness of the cash creditors as well as genuineness of the transaction as per section 68 of the Act. 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. If the assessee is unable to explain the alleged cash credit and consistent escaped, the provisions of 5. ITA No. 73/Kol/2019 AY 2012-13 M/s. Srilakshmi Finvest Pvt. Ltd. section 68 of the Act are attracted. Thus, it is held that the assessee has routed its unaccounted income in the books of account in the form of share capital and security premium by arranging bogus share capital and share premium through accommodation entry provider. 8. Therefore, under these facts and circumstances, we find no infirmity in the finding of the ld. CIT(A) confirming the addition of Rs. 8,58,16,170/- made u/s. 68 of the Act and the same is confirmed. Thus, instant grounds of appeal raised by the assessee are dismissed. 9. The assessee raised another issue in respect of disallowance of Rs. 69,519/- made u/s 14A of the Act made by the AO on the merits of the case while passing the order by the ld. CIT(A) never dealt on the merits of the case in respect of the same. While perusing the impugned order passed by the ld. CIT(A) as well as material available on record, we find that the instant issue was never dealt by the ld. CIT(A) on the merits of the case and no fruitful discussion was made on this issue. Therefore, this limited issue remand back to the ld. CIT(A) to address the same on the merits of the case. Therefore, the instant issue remand back to the file of ld. CIT(A) and decide the same on its merit. 10. In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 10.11.2022 Sd/- Sd/- (MANISH BORAD) (SONJOY SARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 10.11.2022 Biswajit, Sr. P.S. 6. ITA No. 73/Kol/2019 AY 2012-13 M/s. Srilakshmi Finvest Pvt. Ltd. आदेशकȧĤǓतͧलͪपअĒेͪषत / Copy of Order Forwarded to:- 1.अपीलाथȸ/Appellant/: M/s. Srilakshmi Finvest Pvt. Ltd., 18, R.N. Mukherjee Road, Kolkata-700001. 2. Ĥ×यथȸ/Respondent/: Income Tax Officer, Ward 5(1), Kolkata. 3. संबंͬधतआयकरआय ु Èत/ Concerned CIT 4.आयकरआय ु Èत- अपील / CIT (A) 5. ͪवभागीयĤǓतǓनͬध,आयकरअपीलȣयअͬधकरणकोलकाता / DR, ITAT, Kolkata 6.गाड[फाइल/ Guard file. True Copy/ By order Assistant Registrar ITAT, Kolkata Benches, Kolkata