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Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH, KOLKATA
Before: DR. MANISH BORAD & SONJOY SARMA
order
: December 07th, 2022 आदेश ORDER
Per Manish Borad, Accountant Member:
This appeal filed by the assessee pertaining to the Assessment Year (in short “AY”) 2013-14 is directed against the order passed u/s 250 of the Income Tax Act, 1961 (in short the “Act”) by ld. Commissioner of Income-tax (Appeals)-4, Kolkata [in I.T.A. No.: 1507/Kol/2019 Assessment Year: 2013-14 Lokpriya Trade and Agency Pvt. Ltd. short ld. “CIT(A)”] dated 13.12.2018 arising out of the assessment order framed u/s 144 of the Act dated 29.03.2016.
Registry has informed that the appeal is time barred by 122 days. Condonation application has been filed by the assessee. After perusing the same, we find force in the reasons mentioned therein and are satisfied that the assessee was prevented for reasonable cause in filing the instant appeal within statutory time limit. We, therefore, condone the delay and admit the appeal for adjudication. 3. The assessee is in appeal before this Tribunal raising the following grounds: “
1. The Hon'ble CIT (A) has not followed the law of natural justice while confirming additions by the Ld. A.O.
2. That the impugned Appeal Order is bad in law, illegal, and in violation of rudimentary principal of contemporary jurisprudence.
3. That the Hon'ble Commissioner of Income Tax (Appeal) has erred in law and on facts in confirming the addition of share premium of Rs. 19,17,30,000/- as unexplained cash credit despite the fact the no such share premium was received during the year under the consideration.
4. That the Hon'ble Commissioner of Income Tax (Appeal) has erred in law and fact While confirming the addition of Rs. 9,077/- on account of non-verification of expenses incurred by the assessee despite the fact that all expenses were supported with the vouchers.
5. That the Appellant craves leave to add/alter any/all grounds of appeal before or at the time of hearing of the Appeal.”
4. Brief facts of the case as culled out from the records are that the assessee is a private limited company engaged in the business of investment and trading in shares. NIL income declared in the e-return of income filed on 19.09.2013 for AY I.T.A. No.: 1507/Kol/2019 Assessment Year: 2013-14 Lokpriya Trade and Agency Pvt. Ltd. 2013-14. Case selected for scrutiny through CASS followed by serving of notices u/s 143(2) & 142(1) of the Act. There was repeated non-compliance by the assessee to the notices and summons issued. Final notice was again issued on 10.03.2016 show causing the assessee as to why not the sum of Rs. 19,17,30,000/- credited in the books of accounts towards security premium should be treated as unexplained cash credit u/s 68 of the Act and why not expenses of Rs. 9,077/- be disallowed for non-production of supporting documents. Again, the assessee failed to appear. Ld. AO after giving a detailed finding and referring to the judicial pronouncements, came to a conclusion that the assessee miserably failed to prove the identity and creditworthiness of the shareholders and the genuineness of the transaction and therefore, following the ratio laid down by the Hon’ble Supreme Court in the case of CIT vs. Durga Prasad More reported in 82 ITR 540 and in the case of Sumati Dayal vs. CIT reported in 214 ITR 801 made the addition for the unexplained security premium u/s 68 of the Act and also disallowed the expense of 9,077/- and framed the best judgment u/s 144 of the Act on 29.03.2016 assessing the income at Rs. 19,17,39,080/-.
5. Aggrieved, the assessee preferred appeal before ld. CIT(A) and on four occasions failed to appeal and notices sent through postal authorities were returned unserved on two occasions for insufficient address, company not found at the registered address and on two occasions there was no response. Since the assessee failed to produce any material to controvert the finding of ld. AO and the conduct of the assessee being consistent of Page 3 of 6 I.T.A. No.: 1507/Kol/2019 Assessment Year: 2013-14 Lokpriya Trade and Agency Pvt. Ltd. avoiding the date of hearing, ld. CIT(A) confirmed the finding of ld. AO.
6. Aggrieved the assessee is now in appeal before this Tribunal. On multiple occasions notice of hearing were sent through registry post but there is no compliance. Ld. D/R supported the order of both the lower authorities and stated that impugned additions should be confirmed.
We have heard rival contentions and perused the records placed before us. Addition u/s 68 of the Act for unexplained cash credit (security premium) at Rs. 19,17,30,000/- and disallowance of Rs.9,077/- are challenged before us by the assessee. We observe that the assessee which is a private limited company and is statutorily required to maintain its books of accounts and get then audited is in the business of investment and trading in shares. NIL income was declared in the e-return. Security premium of Rs. 19,17,30,000/- was received during the year. Ld. AO asked the assessee to explain the said credit on multiple occasions which the assessee was duty bound to explain so as to avoid the invocation of the provisions of Section 68 of the Act which relates to unexplained cash credit. It is not in dispute that the assessee received the alleged sum during the year towards security premium. Ld. AO was justified in asking the assessee to prove the identity and creditworthiness of the shareholders/share applicants and the genuineness of the transaction. However, all the efforts of ld. AO went in vain as the assessee did not comply to any of the notices and even before the ld. CIT(A) the assessee did not I.T.A. No.: 1507/Kol/2019 Assessment Year: 2013-14 Lokpriya Trade and Agency Pvt. Ltd. appear on any occasion and similar lethargic approach of the assessee stands continued before this Tribunal. Also, the assessee has not filed any application stating any reasonable cause for not appearing on the given dates of hearing. Except filing the appeal, there is no other effort from the side of the assessee to pursue its appeal. Unless and until the documents and the other materials are filed to explain the alleged cash credit it is not possible to accept the grounds raised
by the assessee and thus, it is presumed that the assessee is unable to explain the source of alleged security premium.
8. Under these given facts and circumstances of the case, we fail to find any infirmity in the detailed finding of ld. AO as well as ld. CIT(A) duly supported by judicial pronouncements and therefore, the addition for unexplained security premium u/s 68 of the Act is confirmed. Thus, all the grounds raised by the assessee are dismissed.
9. In the result, the appeal filed by the assessee is dismissed. Kolkata, the 07th December, 2022. Sd/- Sd/- [Sonjoy Sarma] [Manish Borad] Judicial Member Accountant Member Dated: 07.12.2022 Bidhan (P.S.)
I.T.A. No.: 1507/Kol/2019 Assessment Year: 2013-14 Lokpriya Trade and Agency Pvt. Ltd. Copy of the order forwarded to:
1. 1. Lokpriya Trade and Agency Pvt. Ltd., 3A, Garstin Place, 6th Floor, Kolkata-700 001.
2. ITO, Ward-6(2), Kolkata. 3. CIT(A)-4, Kolkata. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata.