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Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH, KOLKATA
Before: SRI SANJAY GARG & SRI RAJESH KUMAR
order
: February 9th, 2022 ORDER
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee agitating against the order dated 26.12.2019 of the Commissioner of Income Tax (Appeals)-22, Kolkata [hereinafter referred to as ld. ‘CIT(A)’] passed u/s 250 of the Income Tax Act, 1961 (hereinafter the ‘Act’). The assessee in this appeal has taken the following grounds of appeal: “1) For that on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in confirming addition of Rs. 4,53,00,000/- made by the A.O. on account of share capital treating the same as unexplained credit. 2) For that on the facts and in the circumstances of the case, the Ld. CIT(A) ought to have considered that the assessee company had discharged its onus by furnishing all the relevant documents in connection with the share capital raised and also proved the identity and creditworthiness of the share applicants and genuineness of transactions. 3) For that the issue relating to the raising of share capital is concluded in favour of the assessee by the judgment of the Hon’ble Supreme Court in the case of Lovely Export (P) Ltd. 216 CTR 195 holding that addition on account of share capital cannot be made in the hands of the recipient company. 4) That the appellant craves leave to add, alter or delete all or any of the grounds of appeal.”
2. At the outset, Mr. Siddharth Agarwal, ld. Counsel for the assessee has stated that the impugned additions have been made in respect of share capital received by the Assessment Year: 2012-13 Saakshee Sales (P) Ltd. assessee. The Assessing Officer (hereinafter the ‘AO’) doubted the identity and creditworthiness of the subscriber companies and genuineness of the transactions. The ld. Counsel for the assessee has further submitted that the AO has given a categorical observation that the assessee could not produce the directors/managing directors of the subscriber companies before him for the purpose of recording their statement for the purpose of verification of the identity and creditworthiness of the subscriber companies and genuineness of the transactions. The ld. Counsel for the assessee has further submitted that the assessee was given a very short duration of 5 (five) days to produce the directors/managing directors of the subscriber companies which was not possible in such a short time. The ld. Counsel for the assessee, Mr. Siddharth Agarwal has given an undertaking at Bar that if given a chance, the assessee will produce the directors/managing directors, as the case may be, of the subscriber companies before the AO for the aforesaid purpose of verification of identity and creditworthiness of the subscriber companies and genuineness of the transactions. He has, therefore submitted that the matter may be restored to the file of the AO for the aforesaid purpose. The ld. D/R has not objected to the same.
3. In view of this, the impugned order of the ld. CIT(A) is set aside and the matter is restored to the file of the AO with a direction that the assessee, as per the undertaking given by his Counsel, will produce the directors/managing directors, as the case may be, of the subscriber companies before the AO and the AO, after recording their statement and appreciation of evidence before him, will pass assessment order afresh.
The appeal of the assessee is treated as allowed for statistical purposes. Order is pronounced in the open court on 09.02.2022. Sd/- Sd/- [Rajesh Kumar] [Sanjay Garg] Accountant Member Judicial Member Dated: 09.02.2022 Bidhan (P.S.)
Assessment Year: 2012-13 Saakshee Sales (P) Ltd. Copy of the order forwarded to:
1. 1. Saakshee Sales (P) Ltd., C/o Subash Agarwal & Associates, Advocates Siddha Gibson, 1, Gibson Lane, Suite 213, 2nd Floor, Kolkata-700 069.
2. Income Tax Officer, Ward-5(2), Kolkata.
3. CIT(A)-22, Kolkata. (sent through mail) 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. (sent through mail)