ITO, WARD - 1(4), KOLKATA vs. M/S. DHAN LAXMI GOLD & JEWELLERS PVT. LTD., KOLKATA

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ITA 2007/KOL/2018Status: DisposedITAT Kolkata09 March 2022AY 2012-134 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision to delete the disallowance, finding that the assessee had successfully proved the identity, creditworthiness of investors, and genuineness of the share capital transactions. The assessee provided necessary documentation and investor confirmations before the CIT(A).

What were the facts?

The Assessing Officer (AO) added Rs. 4,28,00,000/- received as share capital and premium to the assessee's income as unexplained cash credit. The assessee failed to provide evidence during the assessment proceedings.

What were the issues?

Whether the CIT(A) was justified in deleting the addition made by the AO on account of unexplained share capital and premium. Whether the assessee had discharged its onus to prove the identity, creditworthiness, and genuineness of the share transactions.

Which sections of the Income-tax Act were involved?

Section 68,Section 143(3),Section 131,Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA BENCH “C”, KOLKATA

Before: SHRI SANJAY GARG & SHRI RAJESH KUMAR

For Appellant: Shri S.M. Surana, Advocate
For Respondent: Shri Biswanath Das, Addl. CIT
Hearing: 03.01.2022Pronounced: 09.03.2022

O R D E R

PER RAJESH KUMAR, ACCOUNTANT MEMBER:

1.

The present appeal has been preferred by the revenue against the order passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’) by the Commissioner of Income Tax(Appeals)-7, Kolkata (hereinafter referred as the ‘CIT(A)’) relevant to A.Y 2012-13.

2.

The only issue is against the order of Ld. CIT(A) deleting the disallowance of Rs. 4,28,00,000/- made by the AO u/s 68 of the Act as unexplained cash credit.

3.

The facts in brief are that the assessee filed the return of income on 27.09.2012 declaring total income of Rs. 41,500/-. The case of the assessee was selected for scrutiny under ‘CASS’ and statutory notices were duly issued and served upon the assessee. During the course of assessment proceeding, the AO observed that Dhan Laxmi Gold & Jewellers Pvt. Ltd. A.Y. 2012-13 the company has received Rs. 4,84,71,100/- as fresh subscription of share capital including share premium and accordingly issued summons u/s 131 of the Act to the directors of the assessee company to personally appear with all books of account, bills, vouchers and other documents. Similarly, the assessee was also called upon to furnish all the documentary evidences to prove the genuineness of the transactions and identity and creditworthiness of the investors. But despite best effort by the AO none appeared nor any books of accounts / evidences as required by the AO were produced and thus share capital and share premium could not be verified. As a result, the same was added to the income of the assessee as unexplained cash credit in the assessment framed u/s 143(3) of the Act. The aggrieved assessee challenged the assessment order before the ld CIT(A).

4.

In The appellate proceedings, the Ld. CIT(A) allowed the appeal of the assessee after the assessee filed all the evidences/confirmations of the investors before Ld. CIT(A) comprising details as to names, addresses of the investors, their PAN and confirmations etc. The Ld. CIT(A) called for remand report from the AO on the various evidences filed before the CIT(A). The ld CIT(A) finally allowed the appeal of the assessee on the basis of remand report by holding that the assessee has proved to all the three ingredients of section 68 of the Act namely identity, creditworthiness of the investors and genuineness of the transactions. Now the revenue is in appeal before us.

5.

After hearing the parties and perusing the material on record including the remand report sought by the Ld. CIT(A) from the AO on the various evidences/documents filed by the assessee and also the appellate order, we note that the assessee

Dhan Laxmi Gold & Jewellers Pvt. Ltd. A.Y. 2012-13 has proved the identity , creditworthiness of the investors and genuineness of the transactions of share capital. We observe from the remand report that all the investors had appeared before the AO and filed the necessary evidences to prove the transactions of share capital. Based on the remand report, the Ld. CIT(A) has given a finding of fact that all investors have filed necessary documents in response to notices issued u/s 133(6). The Ld. CIT(A) also noted that summons u/s 131 of the Act were issued to the directors of the subscribing company M/s. Vasundhara Vinimay Pvt. Ltd. and in compliance thereto Mr. Amit Kumar Agarwal, director of the said company appeared and his statement was recorded on oath. Ld. CIT(A) also noted the share application money has been received from the directors of the assessee-company and their close relative or from group company and identities and creditworthiness of the investors and genuineness of the transactions were duly proved. Therefore keeping in view these facts, we do not find any merit in the contentions of the Ld. DR that Rs. 4,28,00,000/- raised by the assessee by way of share capital and share premium has wrongly been deleted by the Ld. CIT(A) and accordingly the appeal of the revenue is by dismissed.

6.

In the result, the appeal of the revenue is dismissed.

Order pronounced in the open court on 09.03.2022.

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