M/S PENGUIN SECURITIES PVT. LTD.,KOLKATA vs. I.T.O.,WARD-8(3), KOLKATA

The aforesaid stay applications have been preferred by separate assessee’s seeking stay of the demand arising after their appeals have been dismissed by the Ld. CIT(A). However, it has been brought to our notice during the hearing of stay applications itself that all the appeals are arising from the action of the AO wherein the AO had issued notices u/s. 133(6) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) which was for finding out the identity, creditworthiness and genuineness of the share subscribers. It was brought to our notice that the assessee and share subscribors had fully complied with the requisitions asked by the AO, however, the AO took adverse view and consequently the addition was saddled upon the assessee and initially the demand was raised by the AO; and thereafter since the appeal of the assessee before the Ld. CIT(A) having been dismissed, the demand has arisen. Therefore, taking into consideration these facts, we are inclined to dispose of all the quantum appeals itself.

We note that all these appeals preferred by the assessee are arising against the separate orders of the Ld. CIT(A)-3, Kolkata dated 07.08.2019, 09.08.2019 and 08.08.2019 for AY 2012-13 respectively. For disposal of all these appeals we are taking the in respect of M/s. Raghuvir Suppliers Pvt. Ltd. as the lead case and the result of which will be applied in all other cases.

At the outset, the Ld. Counsel for the assessee brought to our notice that during the assessment proceedings, the AO had issued notice u/s. 133(6) of the Act to the share subscribing companies which were duly served upon them; and pursuant to the notice, all the share subscribers have complied with the requisitions stated therein by the AO. According to the Ld. Counsel, even the summon u/s. 131 of the Act was complied with by the directors of the share subscribing companies by appearing before the AO. Even it was 3 SA No. 108/Kol/2019 & Raghuvir Suppliers Pvt. Ltd. AY- 2012-13 brought to our notice that out of the 17 share subscribing companies, 14 are NBFCs having recognition of the RBI. However, the AO has given a blind eye to the aforesaid facts and has arbitrarily made the addition u/s. 68 of the Act the entire share capital plus premium of Rs.1,70,00,000/- (170000 shares at a premium of Rs.90/- per share with face value of Rs. 10/- each) and the Ld. CIT(A) has dismissed the appeal without going into these facts, so the assessee is aggrieved by the action of Ld. CIT(A)/AO and pleads that the addition be deleted or in the alternative to send back to AO to de novo frame assessment and frame the assessment by passing a speaking order.

Per contra, the Ld. DR vehemently opposes any interference in the action of Ld. CIT(A) and contended that this capital infused into the assessee company are suspicious and the AO/Ld. CIT(A) has disbelieved the assessee’s claim and, therefore, has made the addition u/s. 68 of the Act which does not require any interference.

Having heard both the parties and after perusal of the records, we note that the assessee had infused share capital plus premium to the tune of Rs.1,70,00,000/-. We note that the AO had issued notice u/s. 133(6) pursuant to which the share subscribers have filed their relevant documents as sought for by the AO. The AO also had issued summon u/s. 131 of the Act to the share subscribing companies to produce their directors which has also been complied with by the share subscribing companies which fact has been acknowledged by the AO. Despite these actions on the part of share subscribing companies, the AO has disbelieved the identity, creditworthiness and genuineness of the share subscribers and has made an addition u/s. 68 of the Act. It was also brought to the notice of the AO that out of the total seventeen (17) share subscribers, fourteen (14) are NBFCs. It was brought to our notice that the NBFCs are given license by RBI after due verification. Thus, according to assessee, their (NBFC) identity cannot be disbelieved. In any case, we note that assessee had infact complied with the sec. 133(6) notice and 131 summons issued to them. The AO if not satisfied with the enquiry conducted by him should have pointed out the deficiency, if any, found during the enquiry and without doing so, we are of the opinion that the AO ought not to have made the addition on the basis of mere suspicion or conjectures. We note that despite the assessee as well as the share subscribers have responded to the AO’s notice u/s. 133(6) and summons u/s. 131 of the Act and AO having acknowledged about these

Since all the appeals have been restored back to the file of the AO for passing de novo assessment order, therefore, the stay applications become infructuous and stands dismissed.