MEGHANA COMMODITIES PVT. LTD., ,HOWRAH vs. ITO, WARD - 9(1), KOLKATA , KOLKATA

The assessee in the present case is a Company, which is engaged in the business of investment in shares. The return of income for the year under consideration was filed by it on 28.09.2012 declaring total income of Rs.4,532/-. During the course of assessment proceedings, the claim of the assessee of having raised the share capital amounting to Rs.4.02 crores was examined by the Assessing Officer. During the course of the said examination, he issued summons under section 131 to the three Meghana Commodities Pvt. Limited Directors of the share subscriber Companies as well as to the Director of the assessee-company. Two of the said four summons were returned by the Postal Authorities un-served while there was no response to the remaining two summons. The assessee also failed to establish the identity and creditworthiness of the concerned share subscriber companies and the genuineness of the relevant transactions. The Assessing Officer, therefore, treated the entire share capital of Rs.4.02 crores received by the assessee during the year under consideration as unexplained cash credit and an addition to that extent was made by him to the total income of the assessee in the assessment completed under section 143(3) vide an order dated 17.03.2015.

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 assessee vide his appellate order dated 14.03.2018 passed ex-parte. 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. The ld. Counsel for the assessee has submitted that the notices issued by the ld. CIT(Appeals) fixing the appeal of the assessee for hearing were never received by the assessee and the same, therefore, could not be complied with. He has also submitted that proper and sufficient opportunity was not afforded by the Assessing Officer during the course of assessment proceedings to explain the relevant cash credits representing share capital amounting to Rs.4.02 crores in terms of section 68. He has contended that the matter may, therefore, be sent back to the Assessing Officer for giving the assessee a proper and sufficient opportunity to establish the identity and Meghana Commodities Pvt. Limited creditworthiness of the concerned share subscribers as well as the genuineness of the relevant transactions by producing the relevant documentary evidence. The ld. D.R. has also not raised any objection for sending the matter back to the Assessing Officer. We, therefore, 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 deciding the same afresh after giving proper and sufficient opportunity of being heard to the assessee. 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 complete the assessment expeditiously.

In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open Court on January 29, 2019.