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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
This appeal is filed by Pranali commodities private limited, Mumbai (assessee/– appellant) against the appellate order passed by the National faceless appeal Centre, Delhi (the learned CIT – A) for assessment year 2015 – 16 dated 9/2/2023 wherein the appeal filed by the assessee against the assessment order dated 29/12/2017 passed under section 143 (3) by the income tax officer 15 (2) (4), Mumbai (the learned assessing officer) was dismissed for non-compliance by the assessee on 4 occasions before appellate authority.
“1 On facts and circumstances of the case and in law, Ld. CIT(A) erred in passing the appeal order ex-parte without allowing adequate opportunity of being heard and ought to have considered the bonafide reasons that had precluded the appellant to participate in appeal:
2 On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the disallowance of business loss on trading in shares of 4 companies of Rs.4,08,138/-;
The Ld. CIT(A), before confirming the disallowance of loss in trading in shares of Rs.4,08,138/-, ought to have considered the vital facts, being;
a) The exhaustive documentary evidences being Contract-cum-bills, D-mat statements, Global report, bank statements, bhav copy and confirmation of SEBI registered stock broker, etc to justify the genuineness of purchase and sale of shares is filed on record; b) The shares had been transacted, in regular course of business, on floor of stock exchange on which STT, Service Tax had been paid; c) No contrary material or cash trail is found related to appellant is brought on record and the addition had made on the basis of assumption, suspicion and flimsy reasons;
On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the addition u/s.68 of loan received from M/s. Dolex Commercial Pvt Ltd of Rs 30,00,000/-;
5. On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming addition u/s.68 of received from M/s. Consultants of Rs.2,00,00,000/-;
6. The Ld. CIT(A) before confirming the addition u/s.68 of unsecured loans of Rs.2,30,00,000/- (30,00,000+ 2,00,00,000), ought to have considered the vital facts, being:-
a) The identity, credit-worthiness of lenders and genuineness of transactions are supported with documentary evidences being PAN, CIN Master data, Confirmations, Own bank statements, I.T. returns, Balance sheet, bank statements, etc; b) The entire sums had been received only through banking channel by A/c payee cheques/RTGS and the appellant, prior to amendment, is not required to explain the source of payer's funds c) The Ld. AO has not rejected the appellant's books of accounts u/s 145(3) and had not brought any contrary material to disprove the transactions, d) The copies of statement of 3 parties had not been provided to appellant for confrontation and
4. Assessee preferred an appeal before the learned CIT – A. The learned CIT – A issued notices on 31/12/2020, 2/5/2022, 5/12/2022 and 27/1/2023 by email. As per the order of the learned CIT – A the assessee did not upload any return submission in response to the above requirement. Therefore the learned CIT – A noted that the assessee is not interested in pursuing the above appeal. Therefore he held that the appeal of the appellant is liable for dismissal. However in paragraph number 5.1.1 the learned CIT – A held that issue is were examined on the merits in the light of statement of facts and grounds of appeal and the issue raised in this appeal has rightly been
Assessee is in appeal before us. The learned authorized representative submitted a paper book containing 60 pages. Wherein an affidavit of the managing director of the assessee company was submitted. In the effort debited was noted that that notice dated 31/12/ 2020 was in covid Time. The notice dated 2/5/2022 gave the assessee time for filing of the submission of to 15 days. However with respect to the other two notices the time limit for submission was only three days. The claim in the affidavit was that that the notices were sent through email to the earlier chartered accountant who did not inform the assessee. Now assessee has engaged chartered accountant. Further his new chartered accountant also suffered serious medical illness and had to undergo coronary artery bypass surgery and therefore compliance could not be made with respect to the last two notices mentioned by the learned CIT – A. In support of affidavit, the medical certificate of the illness of the chartered accountant was also submitted. In view of the above facts, it was stated that assessee did not get proper opportunity of hearing and the opportunities granted could not be
On the merits of the case he submitted the details that the disallowance of business loss of ₹ 4,008,138 are treated as penny stock is incorrect. In support of the same be submitted the script wise stock register, trade summary and the transaction Bhav copy. It was further stated that the above loss incurred by the assessee has been considered as a profit in penny stock in addition is been made by the learned assessing officer without any reason. He further submitted that assessee is a trader in shares. And in fact assessee has incurred loss. The loss of incurred by the assessee is not proved to be false on the transactions details submitted by the assessee.
With respect to the addition under section 68 of the income tax act with respect to the two companies it was submitted that assessee has submitted the Ledger account, confirmation of account of the parties bank statement of the assessee bank statement of the lenders income tax return of the lending companies and audited balance sheet et cetera of the lenders. All these evidences have not been examined by the learned assessing officer independently and have confirmed the addition of ₹ 230 lakhs merely on the basis of surmises and conjunctures.
In view of the above facts the learned authorized representative submitted that the order of the learned CIT – A holding that the assessee is not interested in pursuing
The learned departmental representative vehemently supported the order of the learned CIT – A and submitted that when the four notices were issued to the assessee and assessee did not file any compliances, the learned CIT – A is justified in disposing of the appeal of the assessee on the merits upholding the findings of the learned assessing officer.
We have carefully considered the rival contention and perused the orders of the lower authorities. We find that the learned assessing officer has made the addition in the hands of the assessee on the basis of report of the DD IT (investigation), Kolkata on penny stock issue relying on the statement of some of the persons. The assessee was neither provided any of the statements nor was provided any opportunity of the cross examination. Therefore the loss claimed by the assessee of ₹ 4,008,138/– was considered as nongenuine loss and same was disallowed. Further the assessee has taken loan from two companies amounting to ₹ 230 lakhs, the learned assessing officer has made the addition under section 68 of the income tax act holding that the above companies are controlled by some entry operators. Assessee provided the information showing the identity, creditworthiness of those parties as well as the genuineness of the transaction. The learned assessing officer made the addition as same are the companies controlled by one of the entry operators who
All other grounds on merit are not adjudicated and left open to be decided by the learned CIT – A.
In the result appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 31.07. 2023.