M/S. SHAKTIGARH TEXTILE AND INDUSTRIES LIMITED.,KOLKATA vs. DCIT, CIR-10(1), KOLKATA., KOLKATA

Assessment Year : 2012-2013 Shaktigarh Textile and Industries Limited (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 19th June, 2023 passed for A.Y. 2012-13. 2. The assessee has raised two grounds of appeal, whereby it has challenged confirmation of addition of Rs.1,00,00,000/-, which was received from a Group Company M/s. Kasa Contrade Pvt. Limited.

Brief facts of the case are that the assessee has filed its return of income at ‘NIL’ on 21.09.2012. The case of the assessee was selected for scrutiny assessment and a notice under section 143(2) was issued and served upon the assessee. On verification of the accounts, it revealed to the ld. Assessing Officer that a sum of Rs.1,00,00,000/- has been credited in the accounts of the assessee on 01.04.2011 against the name of M/s. Kasa Contrade Pvt. Limited in the guise of share application money. The ld. Assessing Officer ultimately treated this cash credit as unexplained and made the addition. Appeal to the ld. CIT(Appeals) did not bring any relief to the assessee.

Before us, ld. Counsel for the assessee took us through page no. 6 of the assessment order and submitted that on the first part, the ld. Assessing Officer has reproduced the copy of the relevant loan ledger. This ledger would show that as on 1.4.2011 opening balance was Rs.5,74,05,326/-. M/s. Kasa Contrade Pvt. Limited Assessment Year : 2012-2013 Shaktigarh Textile and Industries Limited has received the amount of Rs.1 crore through RTGS on 29.03.2011 from an account maintained with SBI, Commercial Branch, 24, Park Street, Kolkata. M/s. Kasa Contrade Pvt. Limited later on amalgamated with the assessee and this amount was credited in the accounts of the assessee. Ld. Counsel for the assssee took us through the accounts of M/s. Kasa Contrade Pvt. Limited in the books of the assessee-company for F.Y. 2010-11, copy of such account is placed on page no.

He took us through all Relevant documents and submitted that this sum of Rs.1,00,00,000/- came to the possession of M/s. Kasa Contrade Pvt. Limited in F.Y. 2010-11 relevant to A.Y. 2011-12, therefore, it is not taxable in A.Y. 2012-13 in the hands of the assessee.

On the other hand, ld. D.R. relied upon the assessment order, wherein ld. Assessing Officer has discussed the facts very elaborately.

We have duly considered the rival contentions. It emerges out from the record that M/s. Kasa Contrade Pvt. Limited has received a sum of Rs.1,00,00,000/- through RTGS from Account No. 30430214498 maintained with SBI, Commercial Branch, 24, Park Street, Kolkata in the name of Shaktigarh Jutepark Infrastructures Limited. This amount was credited in the accounts of Group Company i.e. M/s. Kasa Contrade in Assessment Year : 2012-2013 Shaktigarh Textile and Industries Limited F.Y. 2010-11 relevant to A.Y. 2011-12. Later on, M/s. Kasa Contrade Pvt. Limited merged with the assessee- company and this credit entry came to the accounts of the assessee. It was demonstrated before us that the assessee is responsible for the assets and liability of its predecessor company or amalgamated company being a successor company of the erstwhile M/s. Kasa Contrade Pvt. Limited but its liability of a particular year could be examined in that very year. The erstwhile M/s. Kasa Contrade Pvt. Limited received the money in F.Y. 2010- 11, which could be assessed in A.Y. 2011-12. The assessee can be held responsible for explaining that cash credit of its predecessor or amalgamated company in A.Y. 2011-12 and in not 2012-13.

A perusal of section 68 would indicate that additions would be made for the cash credits received by an assessee in its accounts during the year relevant to A.Y. 2012-13. No amount was received by erstwhile M/s. Kasa Contrade Pvt. Limited and, therefore, being a successor company, it cannot be assessed in the hands of the assessee in A.Y. 2012-13. At the most, it could have been enquired in A.Y. 2011-12, but since no assessment was reopened in A.Y. 2011-12, therefore, addition is not sustainable. We allow the appeal of the assessee and delete the addition.