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Income Tax Appellate Tribunal, KOLKATA BENCH (A
Before: Shri P.M. Jagtap & Shri S.S. Viswanethra Ravi, JM]
order
: December 20, 2018 ORDER
Per P.M. Jagtap, Vice President
This appeal filed by the assessee is directed against the order of Ld. CIT(A) – 1, Kolkata dated 02.08.2016 passed ex-parte dismissing the appeal of the assessee.
The assessee in the present is a company which is engaged in the business of share trading and investment. The return of income for the year under consideration was filed by it on 24.09.2008 declaring a total income at Nil. In the assessment originally completed u/s 143(3)/147 of the Act vide an order dated 30.04.2010, the total income of the assessee was determined by the AO at Nil. The said assessment was subsequently set aside by the Ld. CIT vide order dated 11.03.2013 passed ex-parte for making a fresh assessment as per the specific directions given to the AO. As per the direction of the Ld. CIT, notices u/s 131 were issued by the AO to the shareholders.
Assessment Year: 2008-09 M/s. Ospray Commercial Pvt. Ltd. None of the shareholders however responded to the said notices. The assessee company also failed to produce the said shareholders for examination before the AO. Keeping in view this position, the Assessing Officer treated the entire amount of share capital and share premium received by the assessee during the year under consideration aggregating to Rs. 12,81,10,000/- as unexplained cash credits and addition to that extent was made by him to the total income of the assessee u/s 68. He also made a further addition of Rs. 78,450/- on account of disallowance of certain expenses and determined the total income of the assessee at Rs. 12,81,88,450/- in the assessment completed u/s 143(3)/147/263 of the Act vide an order dated 28.03.2014.
Against the order passed by the AO u/s 143(3)/147/263, an appeal was preferred by the assessee before the Ld. CIT(A) and since there was no satisfactory 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(A) dismissed the appeal of the assessee vide his impugned order passed ex-parte thereby confirming all the additions made by the AO to the total income of the assessee. Aggrieved by the order of the Ld. CIT(A), 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. Besides explaining the reasons for non-compliance on the part of the assessee before the Ld. CIT(A), the learned counsel for the assessee has submitted that the following Assessment Year: 2008-09 M/s. Ospray Commercial Pvt. Ltd. directions were given by the Ld. CIT to the AO vide his order passed u/s 263 for making the assessment afresh:
1. 1. The A.O should make comprehensive and detailed enquiries into the source of subscription to the share capital.
2. The AO should pass the assessment order after conducting independent details and complete enquiries into the subscription to the share capital and premium to the extent of Rs. 9,54,50,000/- introduced in this case.
3. The AO should trace the source of share capital by enquiring into the various layers through which the money has been introduced in this company by issuing summons u/s 131 of the IT. Act.
4. The AO should not confine himself to conducting enquiries into the subscribers to the share capital only on selective basis.
5. The AO should also send information to the AOs having jurisdiction over the subscriber company to the share capital regarding its investment into share capital & premium paid.
6. The AO should call upon the assessee to identify the persons who are shown as directors of these companies and examine them on oath to verify their credential as directors.
7. The A.O. should pass a speaking order after providing reasonable opportunity to the assessee and verifying the source of share capital including the share premium of all the subscribers and rotation of money through various hands so as to ascertain the true nature of transaction which will bring to the fore, the reality of the Transaction."
As submitted by the learned counsel for the assessee, the Assessing Officer while completing the assessment u/s 143(3)/147/263 however has not complied with the specific directions given by the Ld. CIT and this position clearly evident from the assessment order passed by the AO is not disputed even by the learned DR. We, therefore, consider it fair and proper and in the interest of justice to set aside the impugned order passed by the Ld. CIT ex-parte and restore the matter to the file of the AO for completing the assessment afresh as per the specific directions given by the Ld. CIT in the order passed u/s 263. As undertaken by the learned counsel for the assessee at the time of Assessment Year: 2008-09 M/s. Ospray Commercial Pvt. Ltd. hearing before the Tribunal, the assessee shall make due compliance and extend all possible cooperation in order to enable the AO to complete the assessment expeditiously.
In the result, the appeal of the assessee is treated as allowed for statistical purpose. Order Pronounced in the Open Court on 20th December, 2018.