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Income Tax Appellate Tribunal, “A” BENCH, KOLKATA
Before: SHRI RAJPAL YADAV, HON’BLE & DR. MANISH BORAD, HON’BLE
O R D E R
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
This is the appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-15, Kolkata (hereinafter referred to as the ld. CIT(A)”], passed u/s 250 of the Income-tax Act, 1961 (hereinafter the ‘Act’), dated 27/12/2018 for the Assessment Year 2012-13.
At the outset, the Registry has pointed out that there is a delay of ten days in filing of the appeal by the assessee. The assessee has filed a petition for condonation of delay. After perusing the same, we are convinced that the assessee was prevented by sufficient cause from filing this appeal in time. Hence, we condone the delay and admit the appeal.
When the case was called for hearing, none appeared on behalf of the assessee. The assessee failed to appear on the last date of hearing i.e., on 7th November, 2022 and today i.e., 28/02/2023. Order passed by the Assessing Assessment Year: 2012-13 M/s. Avit Distributors Pvt. Ltd. 2 Officer is also an ex-parte order u/s 144 of the Act and before the ld. CIT(A) also, there is no proper representation on behalf of the assessee. It thus, prima facie indicates that assessee is not interested to prosecute its appeal. We, therefore, decide to adjudicate the appeal on the basis of available records and the submissions of the ld. D/R.
We have heard the ld. D/R and perused the record placed before us. The assessee has raised four grounds of appeal
of which, Ground Nos. 1 & 4 are general in nature and need no adjudication.
5. The effective grounds are Ground Nos. 2 & 3, through which, action of the ld. CIT(A) in confirming the addition u/s 68 of the Act of unexplained share capital of Rs.3,50,00,000/- is challenged and further stated that the ld. CIT(A) has erred in not taking cognizance of the submissions of the assessee given on 15/03/2018. We notice that the assessee is a Private Limited Company and income of Rs. 1,030/- was declared in the e-return filed on 27/09/2012. Case was selected for scrutiny through CASS followed by notices u/s 143(2) & 142(1) of the Act. In response to the notice, no one appeared nor any explanation for non- appearance was furnished. On verification of the Income-tax database and the return filed by the assessee, ld. Assessing Officer noticed that during the year under consideration, assessee has received share premium amounting to Rs.3,50,00,000/-. Thus, ld. Assessing Officer wanted to examine the nature and source of the said sum received by the assessee company. Further, since there was no representation, ld. Assessing Officer proceeded to frame a best judgment assessment and invoked the provision of Section 68 of the Act and made an addition for unexplained cash credit in the form of share capital of Rs.3.50 Crores and assessed the income at Rs.3,50,01,030/-.
Assessment Year: 2012-13 M/s. Avit Distributors Pvt. Ltd. 3 6. We further notice that the assessee challenged this addition before the ld. CIT(A). In the statement of fact, filed along with Form No. 35, assessee has accepted that it has received the alleged sum but challenged the addition merely on the ground that company is yet to start its operations for all practical purpose and, therefore, the facts need to be verified after conducting proper and just enquiry. However, when the case was called for hearing on 28/11/2018, 15/03/2018 and 23/03/2018, assessee failed to avail these opportunities and did not appear nor file any written submissions before the ld. CIT(A), who after placing reliance on various judicial pronouncements confirmed the action of the ld. Assessing Officer.
Before us, there is no representation by the assessee, no details have been filed in the form of any paper book. Even statement of facts has not been furnished in the details. It is an admitted fact that the assessee has received Rs.3.50 Crores during the year as observed by the ld. Assessing Officer in the assessment order. Though, in the grounds, the assessee has stated that only Rs.1,00,000/- was received but the said amount is itself contradictory looking to the facts narrated by the assessee while filing Form No. 35 before the ld. CIT(A).
Now, once it is confirmed that assesse has received Rs.3.50 Crores during the year, then, ld. AO was within his jurisdiction to examine the said receipts in line with the provisions of Section 68 of the Act, which reads as follows:- “68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year: [Provided that] where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited Assessment Year: 2012-13 M/s. Avit Distributors Pvt. Ltd. 4 consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless— (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory: [Provided further] that nothing contained in the first proviso [or second proviso] shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10.]”