I.T.O.,WARD-2(4), KOLKATA vs M/S VEDIC REAL ESTATE PVT. LTD., KOLKATA

Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

Before: SHRI SANJAY GARG, HON’BLE & SHRI GIRISH AGRAWAL, HON’BLE

For Appellant: Shri Miraj D. Shah, Advocate

Hearing: 10/11/2022Pronounced: 06/02/2023

Per Shri Sanjay Garg, Judicial Member:

The present appeal is directed at the instance of the revenue against the order of the Learned Commissioner of Income Tax (Appeals) – 17, Kolkata (hereinafter the “ld. CIT(A)”) dt. 11/03/2019, passed u/s 250 of the Income Tax Act, 1961 (“the Act’), for Assessment Year 2012-13. 2. The revenue has raised the following grounds of appeal:-

“1. In the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition made by AO of Rs.3,53,32,000/- u/s. 68 of the I.T. Act as because the assessee has failed to substantiate the genuineness of transaction and creditworthiness of the share holding company and summon u/s 131 of the I.T. Act issued to the assessee company for producing director of the share holding company was not complied with.

The appellant craves the leave to make any addition, alteration, modification etc. of the grounds either before the appellate proceedings, or in the course of appellate proceedings.”

The brief facts of the case are that the Assessing Officer during the assessment proceedings noted that the assessee company had received share application and share premium amounting to Rs.3,53,32,000/- from its group company, namely, Tara Silk Pvt. Ltd.. Since the summons issued to Assessment Year: 2012-13 M/s. Vedic Real Estate Pvt. Ltd. 2 the assessee company have not been complied with, therefore, the Assessing Officer held that verification of the share capital introduced during the previous year could not be made due to non-compliance on the part of the assessee. He accordingly treated the aforesaid share application and share premium amounting to Rs.3,53,32,000/- as unexplained income of the assessee and added back the same u/s 68 of the Act into the income of the assessee.

3.1.

Aggrieved the assessee preferred an appeal before the ld. CIT(A). Before the ld. CIT(A), the ld. Counsel for the assessee submitted that, the Assessing Officer had failed to correctly appreciate the facts on the file, that all the required details and documents were furnished which included interalia name and address of the share subscribers, PAN of the shareholders, ITR acknowledgements, statement of accounts and bank statements. It was also submitted before the ld. CIT(A) that there was a complete non-application of mind by the Assessing Officer. That the Assessing Officer wrongly noted that the assessee had received share application and share premium from M/s. Tara Silk Pvt. Ltd. of Rs.3,53,32,000/- whereas in fact the total share capital received from the said concern was Rs.29,35,000/- having a premium of Rs. 50/- per share totalling to Rs.1,46,75,000/-. The total amount of share capital and share premium was thus Rs.1,76,10,000/-. However, the Assessing Officer without consulting the record, had taken the figure at Rs.3,53,32,000/-. It was also explained that the share subscriber M/s. Tara Silk Pvt. Ltd. was the group company of the assessee company having common directors. That, there was no suspicion about the identity of the share subscriber. The financial statements of the share subscriber were also submitted to show its Assessment Year: 2012-13 M/s. Vedic Real Estate Pvt. Ltd. 3 creditworthiness and further the said group company was highly interested in the assessee company having common directors, therefore, there was even no suspicion about the genuineness of the transactions. The ld. CIT(A) after considering the relevant submissions and going through the records, accepted the contentions of the assessee and deleted the additions made by the Assessing Officer, observing as under:- “I find that during the relevant assessment year the appellant has allotted 2,93,500 equity shares of Rs 10/- each at a premium of Rs.50/- per share to Tara Silk (P) Ltd. As regards the addition of money received from Tara Silk (P) Ltd I find that the appellant has filed details of Tara Silk (P) Ltd vide its letter dated 15.10.2014. It also filed copy of Form-2 which is return of share allotment filed with the

I.T.O.,WARD-2(4), KOLKATA vs. M/S VEDIC REAL ESTATE PVT. LTD., KOLKATA