FORTRIGHT CONSULTANTS (P) LTD,GUWAHATI vs. INCOME TAX OFFICER, WARD-2(1), GUWAHATI

That the findings and observations of the learned Commissioner of Income Tax (Appeals), Guwahati-1, Guwahati made in his order dated 31/03/2018 are all perverse and contrary to the facts and laws of the case. Assessment Year: 2014-15 Fortright Consultants Private Limited 2

That the learned Commissioner of Income Tax (Appeals), Guwahati-1, Guwahati erred in confirming the addition of Rs.9,49,00,000, being the outstanding balance of creditors, made by the Assessing Officer as unexplained cash credit under section 68 of the Income Tax Act, 1961 (the Act) on irrelevant considerations, arbitrary grounds, on mere surmises, suspicions, conjectures and in disregard of the Principles of Natural Justice.

That the learned Commissioner of Income Tax (Appeals), Guwahati-1, Guwahati mi irected himself in law by enhancing the assessed income of the Assessee Company by the sum of Rs.3,86,50,000 by treating the share application money received by the Assessee Company as unexplained cash credit under section 68 of the Act.

That the learned Commissioner of Income Tax (Appeals), Guwahati-1, Guwahati erred in not allowing reasonable opportunity of showing cause as contemplated under section 251(2) of the Act before exercising his power to enhance the assessed income of the Assessee Company by the sum of Rs.3,86,50,000. 6. That the learned Commissioner of Income Tax (Appeals), Guwahati-1, Guwahati erred in making addition of the share application money of Rs.3,86,50,000 in disregard of the binding judgments of Hon'ble Apex Court, Hon'ble Juri ictional High Court and the Hon'ble Juri ictional ITAT which directly lays down ratio on the merits of the addition of share capital under section 68 of the Income Tax Act, 1961. 7. That the learned Commissioner of Income Tax (Appeals), Guwahati-1, Guwahati had mi irected himself in law in making addition of the sum of Rs.9,49,00,000 and Rs.3,86,50,000 as unexplained cash credit under section 68 of the Act in complete disregard of the binding judgment of the Hon'ble Private Limited [ITAT No. 263 of 2011 and G.A. No. 2856 of 2011].

That the learned Commissioner of Income Tax (Appeals), Guwahati-1, Guwahati had mi irected himself in law in referring to and relying on the untested statement given by one Shri Manish Maheshwari, who has no connection and/or relation with the Assessee Company, in order to draw adverse inference in the instant case.

That the impugned order passed by learned Commissioner of Income Tax is against law and facts of the case.” Assessment Year: 2014-15 Fortright Consultants Private Limited 3

None appeared on behalf of the assessee. Under these circumstances, we dispose off this miscellaneous application ex-parte on merits qua the assessee after hearing the ld. Departmental Representative.

Brief facts of the case are that the assessee is a Private Limited Company engaged in consultancy business. Income of Rs.1806/- declared in the return filed for Assessment Year 2014-15 on 28/09/2014. Case selected for scrutiny through CASS followed by service of notice u/s 143(2) & 142(1) of the Act. The ld. AO completed the assessment proceedings for making an addition of unexplained cash credit of Rs.9,49,00,000/-. The said credit was not through banking channel but it was against the purchase of equity shares from creditors on credit basis and against such equity shares purchased by it, had made investment in other equity shares. The ld. AO was not satisfied with the explanation given for the said credit of Rs.9.49 Crores and made the addition. Thereafter, the assessee approached the ld. First Appellate Authority but no compliance was made. The ld. CIT(A), so far as the additions u/s 68 of the Act at Rs.9.49 Crores was concerned, confirmed the said addition and further enhanced the income of the assessee by making addition for unexplained share capital of Rs.3,86,50,000/-.

Aggrieved, the assessee is in appeal before this Tribunal.

The ld. D/R supported the order of both the lower authorities.

We have heard the ld. D/R perused the record placed before us. We find that the ld. CIT(A) has confirmed the addition u/s 68 of the Act of unexplained credit towards purchases at Rs.9.49 Crores, as the assessee failed to discharge its onus to proof to explain the credit of the creditor, namely, Ecstatic Traders Pvt. Ltd.. Thus, the addition stands confirmed by the ld. CIT(A) and during the course of first appellate proceedings before Assessment Year: 2014-15 Fortright Consultants Private Limited 4 the ld. CIT(A), income of the assessee was further enhance for not explaining the share capital and premium issued during the year amounting to Rs.3,86,50,000/-. Though the assessee has not appeared before us on the date of hearing before us, however, perusal of the ground shows that one of the grievance of the assessee is contravention of principles of natural justice and not allowing proper opportunity of being heard and also for not issuing the showcause notice/ and also not providing ample opportunity of showing cause to the assessee as contemplated u/s 251(2) of the Act and this grievance has been raised through Ground Nos. 1,2 & 5. We are conscious of the fact that for the purpose of adjudication of the issues raised before us, complete facts of the case needs to be addressed and both the sides should be given fair opportunity. Since the impugned order before us is that of the ld. CIT(A) and the same is ex-parte since the assessee did not appear on the given date of hearing even though sufficient opportunity was provided still taking a lenient view and in the interest of justice, we deem it fit and proper to restore the issue raised on merits to the ld. CIT(A), for fresh adjudication. The assessee is directed to place all these documents before the ld. CIT and not to take any adjournment unless required for reasonable cause and explain the facts of the case and the source of cash deposit to the satisfaction of ld. CIT(A) who shall provide the assesse a reasonable opportunity of being heard.

In the result, appeal of the assessee is allowed for statistical purposes.

""यथ" / The Respondent 3. संबंिधत आयकर आयु" / Concerned Pr. CIT 4. आयकर आयु" अपील ( ) / The CIT(A)- 5. िवभागीय "ितिनिध ,आयकर अपीलीय अिधकरण, गुवाहाटी /DR,ITAT, Guwahati, 6. गाड" फाईल /Guard file.