KARGWAL ENTERPRISES PRIVATE LIMITED ,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 10(1)(2), MUMBAI

Per Anikesh Banerjee (JM):

The instant appeal of the assesse was filed against the order of the National
Faceless Appeal Centre (NFAC), Delhi [hereinafter called, ‘Ld. CIT(A)] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) for Assessment Year
2012-13, date of order 03/10/2024. The impugned order emanated from the order of the Learned Deputy Commissioner of Income-tax -10(1)(2), Mumbai [hereinafter

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Kargwal Enterprises Private Limited called, ‘Ld. AO] passed under section 143(3) read with section 147 of the Act, date of order 17/12/2019. 2. When the appeal was called for hearing, there was no appearance on behalf of the assessee. The last date of hearing was fixed on 24/04/2025, on which occasion the assessee had sought an adjournment. The request was duly granted, and the matter was adjourned to 26/06/2025, with due intimation given to both parties. However, on the date of hearing today, there was neither any appearance nor any application for adjournment filed on behalf of the assessee. Nevertheless, considering the merits of the case, we proceeded to dispose of the appeal ex parte as against the assessee, after hearing the Ld. DR and upon perusal of the material available on record.
3. We heard the Ld.DR and perused the material placed on record. We find that during the impugned assessment year, the assesse has received capital in form of share application money amounting to Rs.2,85,00,000/- and share capital amounting to Rs.15 lakhs which comes total amount to Rs.3 crores, from different parties. The assessee’s case was reopened under section 148 and assessment was completed U/s 147 r.w.s. 143(3) of the Act. During the assessment proceedings, the Ld.AO proceeded to verify the identity, genuineness and creditworthiness of the transactions related to share capital received by the assesse during the impugned assessment year. But on issuance of notice under section 133(6) of the Act, it is noted in the order sheet that none of the notices was served on the parties as all the notices were returned unserved. The Ld.AO, in his order at para 3.1 also mentioned that the assesse had not furnished complete documentary evidence like bank account, statement of the applicants, as well as copy of the ITR and balance- sheet in respect of alleged share applicant. Though, the assessee had submitted

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Kargwal Enterprises Private Limited the documentary evidence before the Ld. AO related share applicants, but the identity was not proved as the the notices issued under section 133(6) of the Act could not be served. The Ld.AO has treated the entire transaction as bogus and added back under section 68 of the Act. The aggrieved assesse filed an appeal before the Ld. CIT(A), but the Ld.CIT(A), in the absence of proper documents, upheld the order of the Ld.AO and confirmed the addition. Being aggrieved, the assesse filed appeal before us.
4. The Ld.DR vehemently argued and stated that the identity of the party, creditworthiness and genuineness of the party is not proved before any of the authorities. The assessee had made a sham transaction related to crediting of share capital. Accordingly, the entire addition should be upheld.
5. In our considered view, it is observed that during the assessment as well as appellate proceedings, the assessee failed to furnish any documentary evidence to establish the identity, genuineness, and creditworthiness of the concerned parties, which are the essential prerequisites for compliance with the provisions of Section 68 of the Act. Even before the Tribunal, despite being granted sufficient opportunity, the assessee did not submit any supporting evidence. Moreover, the assessee has repeatedly remained absent during the proceedings before the Tribunal. In the absence of proper and adequate documentation, we find no infirmity in the view taken by the Ld. CIT(A). Accordingly, the appeal filed by the assessee stands dismissed.

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Kargwal Enterprises Private Limited

BY ORDER,
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(Asstt.