SAMUDRA COMMOTRADE PVT. LTD.,KOLKATA vs. ITO, WARD - 1(4), KOLKATA

This assessee’s appeal for assessment year 2009-10 arises against the CIT(A), 5, Kolkata’s order dated 04-09-2018 passed in case no. 460/CIT(A)-5/Wd-1(4)/18-19/Kol involving proceedings u/s 147/143(3)/144/263 of the Income-tax Act, 1961 ( in short ‘Act’).

The assessee’s sole substantive grievance canvassed in the instant pleads that both the lower authorities have erred in law and on facts in holding its share capital/premium amounting to Assessment Year: 2009-2010 Samudra Commotrade Pvt. Limited Rs.99,750,000/- as unexplained cash credits on account of its alleged failure in proving identity, genuineness and creditworthiness of the investor parties as per hon’ble apex court’s judgments in Sumati Dayal & Durgaprasad More reported in [ (1995) 214 ITR 801(SC) & 82 ITR 540(SC)]. A perusal of the case file indicates the instant its involve multiple round of proceedings u/s. 147/143(3)/144 r.w.s 263 of the Act. This assessee is a company engaged in share trading business. It filed its return on 25- 08-2019 declaring total loss of Rs. 4478/-. The same stood assessed. The assessing authority then formed reasons to believe that assessee’s taxable income liable to be assessed had escaped assessment. He therefore initiated section 148/147 proceedings and framed re-assessment dt. 13-04-2012. The CIT then exercised his section 263 revision jurisdiction vide order dt. 27-02-2015 and held that since the Assessing Officer had not carried out necessary investigation regarding impugned share capital/premium, the said re-assessment was erroneous causing prejudice to the interest of the revenue. He therefore directed the Assessing Officer to conduct an independent, detailed and complete investigation regarding assessee’s investor parties.

We proceed further to notice that the assessing authority completed his consequential assessment on 31-03-2016 quashing this taxpayer’s failure to prove identity, genuineness and creditworthiness of the investor parties in the light of hon’ble apex Court’s judgments (supra) to conclude that said share capital/premium was liable to be added as unexplained cash credits u/s. 68 of the Act. The CIT(A) has upheld the impugned additions in his lower appellate discussion under challenge.

This assessee’s appeal is allowed for statistical purposes in above terms.