M/S SATYALAXMI MERCHANTS PVT. LTD.,KOLKATA vs. I.T.O.,WARD-2(4), KOLKATA

The assessee in the present case is a Company, which is engaged in the business of investment and trading in shares. The return of income for the year under consideration was filed by it on 04.09.2012 declaring total income at ‘NIL’. During the course of assessment proceedings, the claim of the assessee of having received share application money along Assessment Year: 2012-2013 M/s. Satyalaxmi Merchants Pvt. Limited with share premium amounting to Rs.5,03,00,000/- was examined by the Assessing Officer. During the course of the said examination, summons under section 131 were issued by the Assessing Officer to the Director of the assessee-company as well as the Directors of the share subscriber companies. The said summons, however, remained un-complied with. Keeping in view the said non-compliance as well as in the absence of the relevant details and documents furnished by the assessee to establish the identity and capacity of the concerned share subscribers as well as the genuineness of the relevant transactions, the Assessing Officer treated the entire share application money along with share premium amounting to Rs.5,03,00,000/- as unexplained cash credit and addition under section 68 to that extent was made by him to the total income of the assessee. He also made a further addition of Rs.12,990/- on account of disallowance under section 14A read with Rule 8D and determined the total income of the assessee at Rs.5,03,12,990/- in the assessment completed under section 143(3) vide an order dated 02.03.2015.

Against the order passed by the Assessing Officer under section 143(3), an appeal was preferred by the assessee before the ld. CIT(Appeals) and since there was no compliance on the part of the assessee to the notices issued by him fixing the said appeal for hearing from time to time, the ld. CIT(Appeals) dismissed the appeal of the asessee vide his appellate order dated 19.07.2019 passed ex-parte thereby confirming both the additions made by the Assessing Officer to the total income of the assessee. Aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal.

We have heard the arguments of both the sides and also perused the relevant material available on record. As submitted by the ld. Counsel for the assessee, none of the notices stated to be issued by the ld. CIT(Appeals) fixing the appeal of the assessee for hearing on various occasions was ever received by the assessee and such non-receipt of Assessment Year: 2012-2013 M/s. Satyalaxmi Merchants Pvt. Limited notices resulted into non-appearance of the assessee when its appeal was called for hearing before the ld. CIT(Appeals). He has also submitted that proper and sufficient opportunity was also not given by the Assessing Officer to comply with the summons issued under section 131 during the course of assessment proceedings. He has submitted that the assessee is in a position to produce the concerned share subscribers for examination before the Assessing Officer along with the relevant documentary evidence and urged that one opportunity may be afforded to the assessee to do so. As the ld. D.R. has not raised any objection for sending the matter back to the Assessing Officer for the required verification of the examination, we set aside the impugned order passed by the ld. CIT(Appeals) ex-parte and restore the matter to the file of the Assessing Officer for making the assessment afresh after giving one more opportunity to the assessee to produce the concerned share subscribers along with the relevant documentary evidence. As undertaken by the ld. Counsel for the assessee, the assessee shall make due compliance before the Assessing Officer and shall extend all the possible cooperation in order to enable the Assessing Officer to make the assessment afresh expeditiously.

In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open Court on November 08, 2019. Sd/- Sd/- (A.T. Varkey) (P.M. Jagtap) Judicial Member Vice-President) Kolkata, the 8th day of November, 2019 Copies to : (1) M/s. Satyalaxmi Merchants Pvt. Limited, 7, Ganesh Chandra Avenue, 5th Floor, Kolkata-700013 (2) Income Tax Officer, Ward-2(4), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 (3) Commissioner of Income Tax (Appeals)-17, Kolkata, 3 Assessment Year: 2012-2013 M/s. Satyalaxmi Merchants Pvt. Limited