SINGAL PIPE FITTINGS PVT. LTD.,HOWRAH vs. ITO, WARD - 13(4), KOLKATA, KOLKATA

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ITA 1762/KOL/2018Status: DisposedITAT Kolkata16 December 2022AY 2012-133 pages
AI SummaryDismissed

What did the Tribunal hold?

The tribunal upheld the addition made by the lower authorities, finding no merit in the appeal as the assessee failed to provide requisite details regarding the share applicants and the transactions.

What were the facts?

The assessee company received share capital and premium amounting to Rs. 3,96,34,604/-. The Assessing Officer added this amount to the income as the assessee failed to prove the genuineness, creditworthiness, and identity of the share subscribers.

What were the issues?

Whether the addition of share capital and premium is justified when the assessee fails to establish the identity, creditworthiness, and genuineness of the share transactions.

Which sections of the Income-tax Act were involved?

Section 68,Section 143(2),Section 142(1),Section 250

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Income Tax Appellate Tribunal, “C” BENCH, KOLKATA

Before: SHRI RAJPAL YADAV, HON’BLE & SHRI GIRISH AGRAWAL, HON’BLE

Hearing: 15/12/2022Pronounced: 16/12/2022

O R D E R

PER SHRI RAJPAL YADAV, VICE PRESIDENT:

1.

The present appeal is directed at the instance of the assessee against the order of the Learned Commissioner of Income Tax (Appeal) - 5, Kolkata (hereinafter the “ld. CIT(A)”) dt. 06/04/2018, passed u/s 250 of the Income Tax Act, 1961 (“the Act’), for Assessment Year 2012-13.

2.

The assessee has taken eight (8) grounds of appeal. However, its substantial grievance is pleaded Ground No. 5, wherein it has been submitted that the ld. CIT(A) has erred in confirming the addition of Rs.3,96,34,604/-, which was added by the Assessing Officer on the ground that the assessee has received share capital and share premium which it failed to prove the genuineness of the transactions, creditworthiness of the applicants and identity of the share subscribers. In relation to the other grounds, the assessee has raised supporting arguments with the main ground.

Assessment Year: 2012-13 Singal Pipe Fittings Pvt. Ltd. 2 3. Brief facts of the case are that the assessee has filed its return of income on 28/09/2012 declaring total income of Rs.57,316/-. The case of the assessee was selected for scrutiny assessment and notice u/s 143(2) of the Act was issued and served upon the assessee. Thereafter, the Assessing Officer had issued notice u/s 142(1) of the Act and directed the assessee to explain the identity, creditworthiness and genuineness of the transactions of fresh share application money amounting to Rs.3,96,34,604/-. The assessee did not reply to the notices issued by the Assessing Officer and accordingly an ex-parte assessment order was passed where addition of this amount has been made with the help of Section 68 of the Act.

4.

Dissatisfied with this, the assessee carried the matter in appeal and its consultant appeared. She submitted the list of applicants who had subscribed the shares of the assessee. The ld. First Appellate Authority after making reference to a large number of decisions including CIT vs. N.R. Portfolio Pvt. Ltd. reported in (2014) 2 ITR 68 (Delhi) and CIT vs. Navodaya Castles Pvt. Ltd. reported in (2014) 367 ITR 306 (Delhi), and held that the assessee is engaged in providing of bogus entry system. It has not possessed any real financial worth. All the share applicants have received same kind of share capital as well as share premium that has been infused in the assessee. In other words, according to the ld. CIT(A) it is a circulated transaction. The ld. First Appellate Authority reproduced the details of share applicant company and how they have arranged the money and thereafter, the ld. First Appellate Authority has held that it is highly improbable that somebody would pay a premium of Rs.990/- for subscribing a Rs.10/- value share of such company which is not doing any business.

Assessment Year: 2012-13 Singal Pipe Fittings Pvt. Ltd. 3 5. In response to the notice of hearing, no one has come present. The notice issues through registered post has returned back unserved. On due consideration of the findings of the revenue authorities, we do not find any merit in this appeal because the assessee has failed to submit any requisite details exhibiting the identities of the share applicants, their creditworthiness and genuineness of the transactions. The ld. CIT(A) has rightly confirmed the addition and we uphold the same. Accordingly the appeal of the assessee is dismissed.

6.

In the result, appeal of the assessee is dismissed.

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