AMRIT CRAFTS PRIVATE LTD.,KOLKATA vs. ITO, WARD-3(1), KOLKATA, KOLKATA

This appeal filed by the assessee is directed against the order of Ld. CIT (Appeals) – 9, Kolkata dated 30.03.2017 passed ex-parte whereby he dismissed the appeal of the assessee.

The assessee in the present case is a company which is engaged in the business of trading in shares and investments. The return of income for the year under consideration was filed by it on 29.09.2012 declaring a total income of Rs. 9,34,420/-. The assessee company during the year under consideration had raised fresh share capital of Rs. 2,26,00,000/-. In this regard, certain details including the list of Amrit Crafts Pvt. Ltd. shareholders were filed by the assessee as required by the AO during the course of assessment proceedings. The assessee however could not produce the shareholders for verification before the AO in spite of specific opportunity afforded in this regard. Keeping in view this failure of the assessee, the AO held that the onus that lay on the assessee to establish the identity and creditworthiness of the shareholders and the genuineness of the relevant transactions was not satisfactorily discharged. He accordingly treated the entire share capital of Rs. 2,26,00,000/- received by the assessee during the year under consideration as unexplained cash credits and added the same to the total income of the assessee u/s 68 in the assessment completed u/s 144 vide an order dated 25.03.2015.

Against the order passed by the AO u/s 144, 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 appellate order dated 30.03.2017 passed ex-parte thereby confirming the addition of Rs. 2,26,00,000/- made by the AO u/s 68. 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. The learned counsel for the assessee has submitted that the detailed written submission was filed by the assessee before the Ld. CIT(A) in support of its case that the addition made by the AO u/s 68 by treating the Amrit Crafts Pvt. Ltd. share capital amount as unexplained cash credits was not sustainable. He has also pointed out from the impugned order of the Ld. CIT(A) that the said written submission was forwarded by the Ld. CIT(A) to the AO for the latter’s comments and since no remand report was submitted by the AO, the Ld. CIT(A) proceeded to dismiss the appeal of the assessee without going into the merits of the case. He has contended that it was thus not a case of non-compliance on the part of the assessee before the Ld. CIT(A) and since the appeal of the assessee was dismissed by the Ld. CIT(A) even without waiting for the remand report of the A.O., the matter may be sent back to the A.O. for fresh consideration. He has also contended that the relevant details and documents furnished by the assessee to explain the relevant cash credits representing share capital in terms of section 68 were not duly considered by the A.O. and addition u/s 68 was made merely because the assessee had failed to produce the concerned shareholders for verification before the A.O. Keeping in view all these facts narrated by the learned counsel for the assessee which are also evident from the respective orders passed by the authorities below, we consider it fair and proper and in the interest of justice to send the matter back to the A.O. for fresh consideration. Even the learned DR has not raised any objection in this regard. The impugned order of the Ld. CIT(A) passed ex-parte is accordingly set aside and the matter is restored to the file of the A.O. for fresh consideration after giving the assessee proper and sufficient opportunity of being heard.