SRI LAKSHMI KANTHA SPINNERS LIMITED,HYDERABAD vs. DCIT, CIRCLE-3(2), HYDERABAD

Aggrieved by the assessment order passed by the Assessing Officer, the appellant-company preferred an appeal before the learned CIT(A). Before the learned CIT(A), the appellant-company initially sought adjournment on one occasion. However, on subsequent dates, neither appeared nor filed any details. Therefore, the learned CIT(A), on the basis of the material available on record, passed order dated 18.11.2023 and upheld the addition made by the Assessing Officer towards unexplained share capital amounting to Rs.14,84,52,240/-.

None appeared for the appellant-company. We have heard Learned DR and perused the material available on record. Initially notices were sent to the appellant- company. Subsequently, the appellant-company has filed an order passed by the National Company Law Tribunal [in “NCLT”], short Hyderabad Bench, Hyderabad dated 18.04.2024, ordering liquidation of the appellant-company in terms of Chapter-III of Part-II of the Insolvency and Bankruptcy Code, 2016 [in short “IBC”] and claimed that, the Company is in the process of liquidation and an Official Liquidator by name Dommeti Surya Ramakrishna Saibaba has been appointed as Liquidator as resolved by the Committee of Creditors [in short “CoC”]. Subsequently, notice has been issued to the Official Liquidator as per the address given to the Tribunal. But, there were no response from the side of Official Liquidator. Therefore, the appeal has been disposed of ex-parte in absence of representation from the appellant-company, after hearing the Learned DR. 5 ITA.No.19/Hyd./2024 6. We have heard submissions of the Learned DR and perused the material available on record. We find that, the Assessing Officer has made addition towards unexplained share capital amounting to Rs.14,84,52,240/- on the ground that the assessee failed to file relevant evidences to prove genuineness of share capital claimed to have been received from 413 persons. Further, in second round of proceedings, although, the Tribunal has given direction to the Assessing Officer to verify atleast 25% to 50% of 413 persons, but, the assessee neither appeared nor filed any details, even though, the Assessing Officer has issued notices u/sec.133(6) of the Act. From the above, it is clear that, the assessee does not have any explanation with regard to share capital claimed to have been received from various persons. Therefore, we are of the considered view that, there is no error in the reasons given by the Assessing Officer to make addition towards un-proved share capital u/sec.68 of the Income Tax Act, 1961. The learned CIT(A) after considering the relevant facts, has rightly sustained the addition made by the Assessing Officer. Thus, we are 6 ITA.No.19/Hyd./2024 inclined to uphold the order of the learned CIT(A) and dismiss the appeal filed by the assessee.

In the result, appeal of the assessee is dismissed.