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Income Tax Appellate Tribunal, DELHI BENCHES “F” : NEW DELHI
Before: SHRI R.K. PANDA & SHRI K. NARASIMHA CHARY
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES “F” : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA No.2921/Del./2017 Assessment Year 2012-13 M/s. Royal Inframart The Income Tax Officer, Pvt. Ltd., D-57, 2nd Ward – 21 (4), vs., Floor, Sham Nagar, New Delhi – 18. New Delhi. PAN AAECR5497F (Appellant) (Respondent) -None- For Assessee : For Revenue : Shri Anil Gandhi, Sr. DR Date of Hearing : 07.12.2021 Date of Pronouncement : 21.12.2021 ORDER PER R.K. PANDA, A.M.
This appeal filed by the Assessee is directed against the order dated 02.03.2017 of the Ld. CIT(A)-36, New Delhi, relating to A.Y. 2012-13.
This appeal was fixed for hearing number of times, but, no one was appearing on behalf of the assessee. Notice issued by the Registry through RPAD on as many as 2 ITA.No.2921/Del./2017 M/s. Royal Inframart Pvt. Ltd., New Delhi. 03 occasions were returned unserved by the Postal Authorities with the remarks “No such person”. The assessee has also not taken any steps to intimate the change of address, if any. Under these circumstances, we deem it fit and proper to decide the issue on the basis of material available on record and after hearing the Ld. D.R.
Facts of the case, in brief, are that the assessee is a company and filed its return of income on 30.09.2012 declaring total income of Rs.43,722/-. During the course of assessment proceedings, the A.O. noted that assessee has received share application money of Rs.10 crores. He, therefore, asked the assessee to discharge the onus cast on it under the provisions of Section 68 of the I.T. Act, 1961 and file confirmations from the alleged share applicants proving their identity and creditworthiness and genuineness of the transaction with supporting evidence. However, there was no compliance to the same. Subsequently, the A.O. again asked the assessee to file details to which the assessee filed the name of the share applicants, the details of which are as under :
3 ITA.No.2921/Del./2017 M/s. Royal Inframart Pvt. Ltd., New Delhi.
S.No. Name & address No. of shares Share capital received including premium (Rs.) 1. Aadhar Ventures 1100 5,50,00,000 India Ltd., 2. Advance Technologies 400 2,00,00,000 Ltd., 3. Dhanus Technologies 500 2,50,00,000 Ltd., Total 10,00,00,000 3.1. The A.O. noted that the shares were issued at huge premium of Rs.49,990/- per share. However, no confirmation whatsoever was filed by the assessee in respect of the share subscribers. Further notice under section 133(6) of the I.T. Act, 1961 were returned unserved with the remark by the Postal Authorities “Left or not available” . He, therefore, confronted the same to the assessee and asked the assessee to produce the 03 parties for his examination. The assessee only filed the name of the share applicants and another new name M/s. Emporis Projects Limited, which was not in the original list of the share applicants filed earlier, was added. Since there was no proper compliance from the side of the assessee to discharge the 4 ITA.No.2921/Del./2017 M/s. Royal Inframart Pvt. Ltd., New Delhi. onus cast on it despite opportunities granted, the A.O. relying on various decisions added an amount of Rs.10 crores to the total income of the assessee under section 68 of the I.T. Act, 1961.
4. In appeal, the Ld. CIT(A) upheld the action of the A.O. by observing as under :
5 ITA.No.2921/Del./2017 M/s. Royal Inframart Pvt. Ltd., New Delhi.
Aggrieved with such order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds :
6 ITA.No.2921/Del./2017 M/s. Royal Inframart Pvt. Ltd., New Delhi. 1. That order made u/s 250 of the Income Tax Act dated 02/03/2017 by the learned CIT (Appeals)- 36 is against the principles of equity and natural justice as the order was passed ex-parte without giving opportunity of being heard to the assessee/appellant company.
2. That by passing the Order ex-parte the Ld. CIT (Appeals)-36 confirmed the order of AO 21(4) in entirety which is unfair.
3. That additions made by Ld. AO and later on confirmed by Ld CIT(A)-36 as referred above, on account of Share Application money/Share Premium received from parties amounting to Rs.10,00,00,000/- is grossly unjust as the same is capital receipt and adding the same in the income of the assessee/appellate company is bad in law.
The appellant craves to add, delete or modify any grounds of appeal at the time of hearing of appeal.”
7 ITA.No.2921/Del./2017 M/s. Royal Inframart Pvt. Ltd., New Delhi.
We have head the Ld. D.R. perused the orders of the A.O. and the Ld. CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the A.O. in the instant case made addition of Rs.10 crores to the total income of the assessee on the ground that assessee could not substantiate the identity and creditworthiness of the Investor Companies and the genuineness of the transaction and the reason for charging huge premium of Rs.49,990/- per share of Rs.10/-. We find the Ld. CIT(A) upheld the action of the A.O, the reasons of which have already been reproduced in the preceding paragraph. We do not find any infirmity in the order of the Ld. CIT(A) on this issue. It is seen that assessee has deliberately not filed the requisite details as called for by the A.O. Even before the Ld. CIT(A) as mentioned by her at para-5 of the order, despite several opportunities granted, there was no compliance, for which the Ld. CIT(A) had proceeded to decided the appeal on the basis of the material available on record. It is the settled proposition of law that for allowing a cash credit, the onus is always on the assessee to substantiate with 8 ITA.No.2921/Del./2017 M/s. Royal Inframart Pvt. Ltd., New Delhi. evidence to the satisfaction of the A.O. regarding the identity and creditworthiness of the Investor/Share applicants and the genuineness of the transaction. In the instant case, despite numerous opportunities granted by the A.O, the assessee failed to substantiate with evidence to his satisfaction regarding the identity and creditworthiness of the share applicants and the genuineness of the transaction. It is also not understood as to how the assessee company was able to get share premium of Rs.49,990/- per share for a Rs.10/- per share when it is not doing any worthwhile business. Even before the Ld. CIT(A), despite number of opportunities granted, the assessee never bothered to appear before her and was seeking adjournment under one pretext or the other just to derail the appeal process. Under these circumstances and considering the fact that assessee failed to substantiate the identity and creditworthiness of the share applicants/ investors and the genuineness of the transaction and the reason for charging huge premium of Rs.49,990/- per share of Rs.10/-, we do not find any infirmity in the order of the Ld. CIT(A) in upholding the addition made by the A.O.
9 ITA.No.2921/Del./2017 M/s. Royal Inframart Pvt. Ltd., New Delhi. Accordingly, the order of the Ld. CIT(A) is upheld and the grounds raised by the assessee is dismissed.
In the result, appeal filed by the assessee is dismissed.
Order pronounced in the open court on 21.12.2021.