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Income Tax Appellate Tribunal, “C” BENCH KOLKATA
Before: SHRI SANJAY GARG & SHRI GIRISH AGRAWAL
O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of Ld. CIT(A)- 12, Kolkata vide Appeal No. 25/CIT(A)-12/Kol/CIT(A)-1/Ward- 1(1)/2016-17 dated 21.12.2017 passed against the assessment order by the ITO, Ward-1(1), Kolkata u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) dated 30.03.2015.
Appeal of the assessee is time barred by 16 days. There is no petition for condonation of delay placed on record by the assessee and the delay does not pertain to period of Pandemic Covid-19 as the impugned order of Ld. CIT(A)-12, Kolkata is dated 21.12.2017 which is claimed to have been received by the assessee on 23.02.2018 as mentioned in Form 36.
Blackberry Impex Pvt. Ltd. AY 2012-13 3. Before us, none appeared on behalf of the assessee. Shri Vijay Kumar, Addl. CIT, DR appeared on behalf of the revenue.
Grounds taken by the assessee in the present appeal are as under:
“1. That the order passed by the Ld. CIT(A)-12 under section 250 is bad in law as well as on the facts and circumstances of the case.
2. That the Ld. CIT(A)-12 was erred on the facts and circumstances of the case in making addition of Rs.1,09,07,00,000/- on account of share capital including share premium u/s. 68 of the Income Tax Act, 1961 by treating the same as unexplained.”
In this case, assessee has filed return of income for the AY 2012- 13 declaring a loss of Rs. 53,173/- on 12.03.2013. Subsequently, the case was selected for scrutiny. Accordingly, notices u/s. 143(2) and 142(1) were issued and duly served on the assessee. In compliance assessee filed some details. On perusal of the return, Ld. AO found that the assessee has raised fresh share capital of Rs.2,36,68,100/- and share premium of Rs.1,06,70,31,900/-.Later on, to verify the identity, genuineness of transaction and creditworthiness of share applicants summons u/s. 131 of the Act was issued to the Director of the assessee company asking him to produce the directors of shareholding company on 24.02.2015 asking him to appear before the Ld. AO personally for examination and recording statement on oath asked for the following details by issuing summons: i) A copy of your voter card along with address proof. ii) A copy of your personal Income tax details (a copy of PAN Card, your return of income for the A.Y.: 2012-13, and copy of your Balance Sheet as on 31.03.2012), are required to be furnished. iii) Please furnish name and detailed address of your subscribers of your share. iv) Please furnish details of your source of fund for share application form, and supplementary documents.
Blackberry Impex Pvt. Ltd. AY 2012-13 v) Copy of Bank statement of the assessee company. vi) Please produce directors of companies who subscribed shares of your company, along with the bank statement, and source of their fund for share application. ' 6. But, none of them appeared before the Ld. AO for examination in compliance to the summons issued u/s. 131 of the Act. Since there was no compliance, the identity, genuineness and creditworthiness of the share applicant companies have not been established because the primary issues regarding the due diligence done, the steps taken for protection of the fund and most importantly the reason for the investment in a company with no track record and that too with such huge premium is not clarified. It was required by the assessee to establish the existence of its shareholders. If the identity of the creditors had not been established, consequently the question of establishment of the genuineness of the transactions or the creditworthiness of the creditors did not and could not arise. Therefore, according to Ld. AO, if the facts of the case are judged in the light of preponderance of probability and normal human behaviour it may be easily inferred that the entire transactions lack substance. According to him, a company that has recently been incorporated without any proven track record does not in any way justify the share capital received not to speak of the hefty premium. The facts of this case clearly reveal that the receipt of share application money in this case is only a facade for conversion of unaccounted money and the non- appearance of the directors only strengthen this point. Thereafter, Ld. AO after analysing various decision of Hon’ble High Courts and lastly relying on the decision in the case of M/s. Star GrihaPvt. Ltd. Vs. CIT and M/s. Bisakha Sales Pvt. Ltd. Vs. CIT came to the conclusion that the entire share capital and share premium received by the assessee to the tune of Rs.1,09,07,00,000/- during the year under consideration is Blackberry Impex Pvt. Ltd. AY 2012-13 treated as unexplained credit and added back to income of the assessee applying sec. 68 of the Act. Aggrieved, assessee went in appeal before the Ld. CIT(A), who after considering the material available on record dismissed the grounds of appeal of the assessee. Aggrieved, assessee is now in appeal before ITAT.
7. We note that there is no appearance on behalf of the assessee despite several notices having been issued and served on the assessee through e-mail, RPAD, more particularly, last one fixing the date of hearing on 9th February, 2023 sent through Sr. DR, ITAT, Kolkata via e- mail. Hence, finding no other alternative, we take up this appeal ex parte qua the assessee, with the able assistance of Ld. Sr. DR. 7.1. Before us, at the time of hearing, neither anybody appeared on behalf of the assessee nor filed any application seeking adjournment. Case was fixed for hearing on 09.02.2023 and we note that several notices have been issued to the assessee. Details of these notices issued by the registry are as under: (i) Notice issued dated 25.07.2022 by RPAD fixing on 16.08.2022. (ii) Notice issued dated 19.08.2022 by RPAD fixing on 21.11.2022. (iii) Notice issued dated 09.01.2023 by RPAD fixing on 09.02.2023 and also through Ld. Sr. DR vide e-mail on 02.07.2023, which is reproduced as under; iv) Ld. Sr. DR has placed on record a letter dated 09.02.2023 addressed to the Bench through which details pertaining to efforts Blackberry Impex Pvt. Ltd. AY 2012-13 made by his office and the office of the ld. AO have been furnished in respect of contacting the assessee to attend the hearing for the appeal filed by it. The same is reproduced as under:
8. These facts gives an impression that assessee is not seriously interested in pursuing the appeal before the Tribunal. We note that the Ld. AO has passed the order considering the merits of the case on the basis of material available on record, he himself has analysed the issue under consideration and has drawn his observation as mentioned in the order itself. Based on his meritorious finding, Ld. CIT(A) dismissed the appeal of the assessee and sustained the addition made by the Ld. AO. The observation and finding of the Ld. CIT(A) are extracted below:
Blackberry Impex Pvt. Ltd. AY 2012-13 Blackberry Impex Pvt. Ltd. AY 2012-13 Blackberry Impex Pvt. Ltd. AY 2012-13 Blackberry Impex Pvt. Ltd. AY 2012-13 Blackberry Impex Pvt. Ltd. AY 2012-13 8.1. After considering the multifold contentions of the assessee, Ld. CIT(A) sustained the addition towards share capital of Rs. 2,36,68,100/- and share premium of Rs. 106,70,31,900/-, totalling to Rs. 109,07,00,000/-.
From the perusal of the analytical observations made by the ld. CIT(A) in arriving at meritorious finding, considering the material available on record, we do not find any reason to interfere with the said findings. Further, this appeal also fails on the limitation aspect since there is no petition placed on record seeking condonation for the delay in filing the appeal, and the said delay is not covered by the period of pandemic of Covid-19. Accordingly, grounds taken by the assessee are dismissed.
We, further, make it clear that if the assessee is advised to move appropriate application to recall this order, then it is at liberty to do so within the prescribed limitation, for just cause and the Tribunal may decide it in accordance with the Act.