DELTA DEALERS PRIVATE LIMITED,KOLKATA vs. INCOME TAX OFFICER WARD 6(3), KOLKATA
Before: Shri Rajesh Kumar & Shri Sonjoy Sarma
Per Sonjoy Sarma, Judicial Member:
This appeal of the assessee is directed against the order dated
27.09.2023 passed by the National Faceless Appeal Centre [hereinafter referred to as ‘the ‘ld. CIT(A)’] for the assessment year 2009-10. 2. Brief facts of the case are that the assessee filed its return of income for the assessment year 2009-10 under the name of Orange
Merchants Pvt. Ltd. being its PAN No.AABCO0792P. The return of the assessee initially processed u/s 143(1) of the Act. Subsequently, the case of the assessee was reopened u/s 147 of the Act and the assessee complied to the notices and assessment order was framed by determining total income of Rs.45,500/-. Immediately, thereafter the said assessment order was set aside by the ld. PCIT, Kolkata-2 by exercising his revisionary juri iction u/s 263 of the Act. In consequence to that, notice u/s 142(1) of the Act was issued to the assessee directing the assessee to submit detailed information regarding the shareholders along with supported evidences in respect of share capital and share
I.T.A. No.650/Kol/2024
Assessment Year: 2009-10
Delta Dealers Pvt. Ltd premium received during the assessment year. While doing so, the Assessing Officer issued notice u/s 131 of the Act to the concerned share subscribing companies and in compliance to the said notice, the share subscribing companies submitted requisite information and their directors were not personally appeared before the Assessing Officer. The Assessing Officer was not satisfied with the compliance made by the share subscribing companies and proceeded to treat the entire amount of share capital and share premium aggregating to Rs.16,26,00,000/- as unexplained cash credit u/s 68 of the Act primarily on the ground that the directors of share subscribing companies failed to appear in person even if the share subscribing companies were duly furnished all necessary details as was required by the Assessing Officer during the assessment proceedings.
Aggrieved by the said order, the assessee preferred an appeal before the ld. CIT(A). However, on the date of hearing, no one was appeared before the ld. CIT(A) and the ld. CIT(A) thereafter passed an ex parte order confirming the addition so made by the Assessing Officer u/s 68 of the Act. While doing so, the ld. CIT(A) stated that the basic documents like Form No.35 with all relevant annexures were not available in the system and the assessee failed to duly upload the such documents, therefore, finally the appeal of the assessee was dismissed treating it as defective.
Aggrieved by the above order, the assessee is in appeal before this Tribunal raising various grounds. The ld. AR at the time of hearing submitted that the assessee company since passing of the impugned order merged with Delta Dealers Pvt. Ltd. vide order of NCLT, Kolkata
I.T.A. No.650/Kol/2024
Assessment Year: 2009-10
Delta Dealers Pvt. Ltd dated 04.04.2019. He further stated that Assessing Officer issued summon u/s 131 which were duly complied by the shareholders and submitted details like ITR, audited financials, allotment letter, bank details, directors’ details, confirmations etc. However, such submission and records were never confronted by the Assessing Officer. One such allottee included Delta Dealers Pvt. Ltd., the company in which the assessee later merged into and has now filed the present appeal before this Tribunal. He also stated that mere non-appearance may not be the ground for making addition especially considering the fact that the many of the subscriber companies were duly assessed by their own juri ictional Assessing Officer and since all the shareholders being granted relief by the Assessing Officer, ITAT or before the Hon’ble High
Court of Calcutta, therefore, allegation and doubts raised by the Assessing Officer with respect to creditworthiness and genuineness of the transaction, is bad in law. The ld. AR in order to prove his case drew our attention to pages 15 to 387 which are the evidences submitted by the subscribing companies before the Assessing Officer during the assessment proceedings. The ld. AR by submitting the above documents stated that the said evidences reflected the creditworthiness of the respective subscribers as per their audited financial statement, their PAN numbers and date and cheque numbers vide which such payments were made at page no.14 of the paperbook which is as under:
I.T.A. No.650/Kol/2024
Assessment Year: 2009-10
Delta Dealers Pvt. Ltd
I.T.A. No.650/Kol/2024
Assessment Year: 2009-10
Delta Dealers Pvt. Ltd
1 The ld. AR pointed out that the copies of the order, judgement of the respective juri ictional Assessing Officer, Tribunal and Hon’ble Calcutta High Court in the case of various shareholders is also referred therein which satisfied the Assessing Officer’s allegation of non-existent of such companies and genuineness of their subscription. Considering the fact that the source has been upheld and needs to be genuine by various orders of this Tribunal and Hon’ble Calcutta High Court is also referred which clearly shows existence of subscriber companies’ genuineness of transaction. The ld. AR further stressed on the issue that since the assessee has merged with Delta Dealers Pvt. Ltd. and the present appeal is in the name of Delta Dealers Pvt. Ltd., it has to be appreciated that the Delta Dealers Pvt. Ltd. is also one of the subscribers to the tune of Rs.95,00,000/- in the then Orange Merchants Pvt. Ltd. Thus, the assessee itself cannot be doubted to have contributed non- genuine money u/s 68 of the Act. The ld. AR further submitted that since the assessee, Delta Dealers Pvt. Ltd., the present appeal stands covered in the assessee own case in PCIT vs. Delta Dealers (P) Ltd. for the assessment year 2009-10 vide order dated 08.11.2024 in ITAT No.148 of 2024 in reported in [2025] 173 taxman.com 911 passed by the Hon’ble Juri ictional Calcutta High Court. The ld. AR further stated that the addition made by the Assessing Officer is based on assumption and without dealing materials based on the record and non-appearance of the directors of the subscriber company cannot be a ground of making addition u/s 68 of the Act. In this connection, the ld. AR further relied on the decision of Hon’ble Juri ictional High Court in the case of Crystal Networks Pvt. Ltd. vs. CIT reported in 353 ITR 171, wherein, Hon’ble Juri ictional High Court held that when the assessee files all necessary evidences and records before the Assessing Officer, then mere failure of the creditors to appear cannot be form basis to invoke section 68 of the Act. He further submitted that once the assessee has I.T.A. No.650/Kol/2024 Assessment Year: 2009-10 Delta Dealers Pvt. Ltd submitted the documents relating to identity, genuineness of the transaction, and credit-worthiness, then the lower authorities have erred in treating the same as unexplained cash credit u/s 68 and 69C of the Act. 5. On the other hand, the ld. DR supported the order of the Assessing Officer but argued that the matter may be set aside to the file of the ld. CIT(A) as the same was ex parte order. In this context, counter statement made by the ld. AR is that all the evidences have been duly produced before the lower authorities and matter is covered in favour of the assessee by the binding precedents of the Calcutta High Court in assessee’s own case. Thus the instant matter needs not required to be set aside to the file of the ld. CIT(A) since it is already covered by the decision of the Calcutta High Court. He further stated that as similar issue Hon’ble High Court as in the case of PCIT vs. M/s Hirak Vyapaar Pvt. Ltd. in ITAT 242/23 held that where Tribunal had gone through the entire evidences and notice stood complied u/s 133(6) by the subscribers the order of deleting addition u/s 68 was upheld. Therefore, the instant issue may be allowed in favour of the assessee by deleting the addition. 6. We, after hearing the rival submissions and perusing the materials available on record, find that in the present case, all necessary records were placed before the Assessing Officer and there is a judicial precedent which covered the case of the assessee and is binding upon. We have already gone through the entire exercise and detailed records to ascertain the applicability of section 68 of the Act. We also consider that Hon’ble Calcutta High Court on the similar point in the case of PCIT vs. M/s Hirak Vyapaar Pvt. Ltd. (supra) wherein the Hon’ble High Court held as under: “The assessment for the year under consideration was completed by the Assessing Officer under Section 143(3) of the Act. Subsequently, the I.T.A. No.650/Kol/2024 Assessment Year: 2009-10 Delta Dealers Pvt. Ltd
Commissioner of Income Tax exercised power under Section 263 of the Act and passed an order on 30th March, 2013 setting aside the assessment order and directing the Assessing Officer to examine the genuineness of the transaction, directing examination of the directors of the company and other matters. Thereupon the Assessing Officer took up the matter for consideration and completed the assessment by order dated 31st March,
2014 holding that the share application money received by the assessee during the year has to be disallowed and added back to the total income of the assessee as unaccounted cash credit as per the provisions of Section 68 of the Act.
Aggrieved by the same, the assessee preferred appeal before the Commissioner of Income Tax (Appeals)-17, [CIT(A)]. Before the Appellate authority the assessee did not appear and the Appellate authority by order dated 20th March, 2017 dismissed the appeal. The assessee carried the matter in appeal to the learned Tribunal. Learned Tribunal, as we find from the impugned order, has done a thorough and elaborate examination of the facts. It also took note of the response filed to the notices issued under Section 133(6) of the Act. Thereafter it proceeded to examine the resource and surplus of the companies which had subscribed to the shares of the assessee company and found that all the share subscribers are regularly assessed to tax, they are filing Income tax Returns; books of accounts were regularly maintained, financial statements were duly audited under the Income Tax Act and transactions have been carried out through banking channel and all the formalities required by the