NAMRATA DEALMARK PVT. LTD.,KOLKATA V. ITO, WARD 11(4), KOLKATA

ITA 465/KOL/2024

AI Insights

Namrata Dealmark Private Limited filed an appeal against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, which confirmed the addition of Rs. 1,95,00,000 to the company's income as unexplained cash credit under section 68 of the Income Tax Act, 1961. The addition was initially made by the Assessing Officer during scrutiny of the company's return of income for the assessment year 2012-13. The case was selected for scrutiny under CASS, and upon finding that shares were issued at a premium without clear financial justification, the Assessing Officer summoned the directors to verify the genuineness of the subscribers. The directors did not appear, leading to the addition being made. The Tribunal dismissed the appeal, referencing similar cases and noting the absence of the directors and the company's poor financials as critical factors.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705697 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Assessment Year: 2012-2013
• Other Referred Cases: BST Infratech Ltd vs. State, Balgopal Merchants vs. State
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Unexplained cash credit
• Section: 143(3); 142(1); 68; 131

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA SHRI GEORGE MATHAN, JUDICIAL MEMBER SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER I.T.A. No. 465/Kol/2024 Assessment Year : 2012-13 Namrata Dealmark Private Limited, 19B, B.B. Ganguly Street, 2nd Floor, Suite No. 3, Kolkata - 700012 [PAN: AADCN4479N] ……..…...…………….... Appellant vs. Income Tax Officer, Ward-11(4), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, 6th Floor, Kolkata - 700069 ................................ Respondent Appearances by: Assessee represented by : None Department represented by : Bonnie Debbarma, Addl. CIT, Sr. DR Date of concluding the hearing : 23.06.2025 Date of pronouncing the order : 30.06.2025 O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER 1. This appeal arises from an order passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 08.01.2024, u/s 250 of the Income Tax Act, 1961 (hereafter “the Act”). 1.1 In this case, it is seen that the appeal has been fixed on as many as four occasions but none have appeared on behalf of the assessee. Accordingly, this matter is being disposed of with the help of Ld. DR. 2. Being aggrieved, the assessee has approached the ITAT with the following grounds: “1. That the Ld. Commissioner of Income Tax (Appeal), NFAC, Delhi erred in passing an order dated 8th of January, 2024 under section 250 of the Income Tax Act, 1961 2 ITA No. 465/Kol/2024 Namrata Dealmark Pvt. Ltd. dismissing the appeal of the Appellant without considering the submission and allowing reasonable opportunity of being heard. 2. That the Ld. Commissioner of Income Tax (Appeal), NFAC, Dellu erred in confirming the addition of Rs 1,95,00,000/-made by the Assessing Officer under section 68 of the Income Tax Act, 1961 on irrelevant considerations and arbitrary grounds. 3. That the Ld. Commissioner of Income Tax (Appeal), NFAC, Delhi erred in confirming the addition of Rs 1,95,00,000/-made by the Assessing Officer under section 68 of the Income Tax Act, 1961 on the basis of judgments which are distinguishable on facts as well as on law 4. That the Ld. Commissioner of Income Tax (Appeal), NFAC erred in confirming the addition of share capital including share premium of Rs. 1,95,00,000/-made under section 68 of the Income Tax Act, 1961 in disregard of the binding judgments of Hon'ble Apex Court, Hon'ble Jurisdictional High Court and the Hon'ble Jurisdictional ITAT which directly lays down ratio on the merits of the addition of share capital and share premium under section 68 of the Income Tax Act, 1961 5. That the Ld. Commissioner of Income Tax (Appeal), NFAC erred in dismissing the appeal by passing order under section 250 of the Income Tax Act, 1961 dated 8 of January, 2024 without admitting the petition for additional ground filed u/s 46A of the act filed by the appellant assessee during the course of appellate proceeding. 6. That the appellant craves leave to add, alter or delete all or any of the grounds of appeal.” 2. Brief facts of the case are that in the instant case return of Income was filed by the assessee showing income of Rs.7.240/-on 21/01/2013. The case was selected for scrutiny under CASS. 2.1 The notice u/s 143(2) and 142(1) were issued requiring certain details and documents. The assessee complied with the terms of the notice and submitted the said documents. On finding shares being issued at a premium, the Id.AO issued summons u/s 131 to the directors of the company, to verify the genuineness of the subscribers of the shares. 2.2 The Director could not personally attend the hearing on the relevant date before the Assessing Officer. However, the AO completed the assessment u/s 143(3) of the Act by making an addition of the entire amount of the share premium of Rs. 1,95,00,000/- as unexplained cash credit u/s 68 of the Act. 3. Before us, the Ld. DR pointed out that there was a clear finding of fact in the Ld. AO’s order that a very high share premia was charged by the 3 ITA No. 465/Kol/2024 Namrata Dealmark Pvt. Ltd. assessee even without there being no clear-cut indication as to the future financial prospects of business or even there being a strong balance sheet at present. In fact, the Ld. AO is seen to have dwelt at length on the poor financials of the company. In light of these circumstances, the Directors were summoned for verification. Admittedly, the Directors did not appear before the Ld. AO and thereafter, he proceeded ahead to add Rs. 1,95,00,000/- u/s 68 of the Act. 3.1 Before the Ld. CIT(A) also, the assessee could not succeed since the fact of poor financials and nonappearance of Directors could not be plausibly explained. The Ld. DR relied on the case of BST Infratech Ltd reported in 468 ITR 111 (Calcutta) and the case of Balgopal Merchants reported in 468 ITR 136 (Cal) 4. We have gone through the orders of authorities below and heard the Ld. DR. We have also perused the judgments in the cases of BST Infratech (supra) and Balgopal Merchants (supra). We find that there are substantial similarities on facts between the present case and the factual issues before the Hon’ble Jurisdictional High Court in the two case laws. Accordingly, we find no merit in the grounds of appeal of the assessee in as much as the fact of high premium on inadequate financials and the nonappearance of the Directors before the Ld. AO would be in, in our opinion, fatal for the assessee’s case and thus, it deserves to be held that the provisions of section 68 of the Act have been correctly applied on the facts of the present case. 5. In result, the appeal of the assessee is dismissed. Order pronounced on 30.06.2025 Sd/- Sd/- (George Mathan) (Sanjay Awasthi) Judicial Member Accountant Member Dated: 30.06.2025 AK, Sr. P.S. 4 ITA No. 465/Kol/2024 Namrata Dealmark Pvt. Ltd. Copy of the order forwarded to: 1.Namrata Dealmark Private Limited 2 Income Tax Officer, Ward-11(4), Kolkata 3. Pr. CIT 4. CIT(A) 5. CIT(DR) //True copy// By order Assistant Registrar, Kolkata Benches "