M/s. Upadan Commodities Pvt. Ltd., , Kolkata V. ITO, Ward - 3(1), Kolkata , Kolkata

ITA 886/KOL/2018

AI Insights

The case involves M/s. Upadan Commodities Pvt. Ltd., which appealed against the order of the CIT(A) confirming additions made by the Assessing Officer regarding bogus share capital and premium, and an addition under Section 14A. The Assessing Officer had added Rs.10,01,00,000 to the assessee's income, suspecting the genuineness of the share capital and premium received. The CIT(A) dismissed the appeal due to the absence of new material to challenge the assessment order. The Tribunal, after reviewing the records and noting the absence of the assessee's representation, upheld the CIT(A)'s decision, agreeing that the assessee failed to demonstrate the genuineness of the transactions or the creditworthiness of the share applicants.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 136130 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 13-12-2022
• Assessment Year: misc
• Appeal Filed On: 03-05-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bogus Share capital
• Section: 131; 68; 14A; 250; 143(2)

Judgement Text

। आयकर अपीलीय अिधकरण ᭠यायपीठ, कोलकाता । IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA BEFORE SHRI RAJPAL YADAV, HON’BLE VICE PRESIDENT AND SHRI GIRISH AGRAWAL, HON’BLE ACCOUNTANT MEMBER I.T.A. No. 886/Kol/2018 Assessment Year: 2012-13 M/s. Upadan Commodities Pvt. Ltd. 2B, Grant Lane Room No. -27A Kolkata - 700012 PAN : AABCU4201D Vs I.T.O., Ward - 3 (1), Kolkata सुनवाई कᳱ तारीख/Date of Hearing : 14/12/2022 घोषणा कᳱ तारीख /Date of Pronouncement: 15/12/2022 आदेश/O R D E R PER SHRI RAJPAL YADAV, VICE PRESIDENT: The present appeal is directed at the instance of the assessee against the order of the Learned Commissioner of Income Tax (Appeal) - 1, Kolkata (hereinafter the “ld. CIT(A)”) dt. 12/03/2018, passed u/s 250 of the Income Tax Act, 1961 (“the Act’), for Assessment Year 2012-13. 2. The assessee has taken eleven (11) grounds of appeal. However, its substantial grievance is that the ld. CIT(A) has erred in confirming the addition of Rs.10,01,00,000/- which was added by the Assessing Officer with the aid of Section 68 of the Act on account of bogus share capital as well as premium. Similarly, in the second fold, the grievance of the assessee is that the ld. CIT(A) has erred in confirming the addition of Rs.21,650/- which was added by the Assessing Officer with the aid of Section 14A of the Act. अपीलाथᱮ/ (Appellant) ᮧ᭜ यथᱮ/ (Respondent) Assessee by : None Revenue by : Shri G. Hukugha Sema, CIT, D/R I.T.A. No. 886/Kol/2018 Assessment Year: 2012-13 M/s. Upadan Commodities Pvt. Ltd. 2 3. In response to the notice of hearing, originally appearance was put from Shri S.M. Surana, Advocate. However, vide letter dt. 09/12/2022, it has been intimated to the Bench that his office is unable to contact the party and, therefore, withdrew their power of attorney. Earlier also, the Bench had issued notice which was returned without any appearance. It is also pertinent to note that neither before the Assessing Officer nor before the ld. CIT(A), any representation was made by the assessee in spite of due notices issued to it. Under these circumstances, we proceed to dispose of this appeal ex-parte, qua the assessee, after hearing the ld. D/R. 4. Brief fact of the case are that the assessee has filed its return of income on 16/12/2012 electronically declaring total income of Rs.2,100/-. Its case was selected for scrutiny assessment and notice u/s 143(2) of the Act was issued and served upon the assessee. On scrutiny of the accounts it was revealed to the Assessing Officer that, the assessee has raised fresh paid up share capital of Rs.11,00,000/- and received share premium of Rs.9,90,00,000/-. The Assessing Officer directed the assessee to submit the identity of the share applicant, their creditworthiness and to demonstrate how the transactions are genuine transactions. The Assessing Officer also issued summons u/s 131 of the Act to the directors of the assessee company asking them to appear in person and also produce the directors of the share holding companies or the persons. All these things remained uncomplied with and accordingly, the Assessing Officer made addition of Rs.10,01,00,000/-. 5. Dissatisfied with the assessment order, the assessee filed an appeal before the ld. CIT(A). The ld. CIT(A) had fixed hearing and issued notice but in spite of adjourning it on three to four occasions, no one came present. The ld. First Appellate Authority has dismissed the appeal by observing I.T.A. No. 886/Kol/2018 Assessment Year: 2012-13 M/s. Upadan Commodities Pvt. Ltd. 3 that the assessee has failed to produce any new material to buttress the appeal and to challenge the assessment order. 6. With the assistance of the ld. D/R, we have gone through the records. After perusal of the record, we are of the view that the assessee is a paper company without any real worth. Nobody is prosecuting this litigation. We fail to understand, as to how the assessee filed the appeal against orders of the authorities below but not interested in prosecuting the appeal before the revenue authorities and also before the Tribunal. However, there is nothing on the record which can demonstrate the genuineness of the transactions or the identity and creditworthiness of the alleged share applicant who have contributed Rs.9,90,00,000/- as premium. The assessee failed to demonstrate its financial health which can attract such huge premium on subscription of its shares. Therefore, we do not have any hesitation in concurring with the findings of the ld. CIT(A) and upholding the same. 7. In the result, appeal of the assessee is dismissed. Order pronounced in the Court on 15 th December, 2022 at Kolkata. Sd/- Sd/- (GIRISH AGRAWAL) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE-PRESIDENT Kolkata, Dated 15/12/2022 *SC SrPs I.T.A. No. 886/Kol/2018 Assessment Year: 2012-13 M/s. Upadan Commodities Pvt. Ltd. 4 आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant 2. ᮧ᭜यथᱮ / The Respondent 3. संबंिधत आयकर आयुᲦ / Concerned Pr. CIT 4. आयकर आयुᲦ)अपील (/ The CIT(A)- 5. िवभागीय ᮧितिनिध ,आयकर अपीलीय अिधकरण, कोलकाता/DR,ITAT, Kolkata, 6. गाडᭅ फाईल /Guard file. आदेशानुसार/ BY ORDER, TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Kolkata