Loading judgment…
Facts
The assessee, Bhomia Buttons Private Limited, filed an appeal against the CIT(A)'s order for AY 2010-11. The assessment was completed under Section 143(3) read with Section 147, and an addition of Rs. 15 lacs was made under Section 68 for unexplained share application money received from M/s. Attractive Finlay (P) Ltd. The assessee failed to respond to notices or provide evidence regarding the genuineness, identity, and creditworthiness of the shareholder during assessment and appellate proceedings.
Held
The Income Tax Appellate Tribunal found no infirmity in the CIT(A)'s order which sustained the addition of Rs. 15 lacs made by the Assessing Officer under Section 68. The Tribunal noted that even before them, the assessee failed to produce any evidence to prove the identity, creditworthiness, and genuineness of the share capital transaction. Consequently, the Tribunal upheld the addition.
Key Issues
Whether the initiation of proceedings under sections 147/148 was valid; Whether the addition of Rs. 15 lacs under Section 68 for unexplained share application money was justified.
Sections Cited
147, 148, 68, 143(3), 115JB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: ‘A’ NEW DELHI
Before: SHRI G.S. PANNU, VICE- & SHRI CHALLA NAGENDRA PRASAD
ORDER PER CHALLA NAGENDRA PRASAD: JUDICIAL MEMBER:
This appeal is filed by the assessee against the order of learned Commissioner of Income-Tax (Appeals), New Delhi dated 22.03.2019 for the assessment year 2010-11. The assessee has raised the following grounds:
“1. On the facts and circumstances of the case and in law, the learned Commissioner of Income-Tax(Appeals) has erred in law in upholding the validity of proceedings u/s 147 read with section 148 of the Act.”
2. That both the initiation of proceedings and the assessment framed without satisfying the pre-conditions for invoking the provisions of section 148 of the Act is invalid and untenable.
3. Without prejudice to the ground 1 & 2 above, on facts and circumstances of the case, the learned Commissioner of Income- Tax(Appeals) has erred in law in upholding the addition of Rs.15 lacs made u/s. 68 of the Act on account of share application money received.”
Several notices were issued through speed post with the acknowledgement due posting the case for hearing on 15.06.2022, 21.09.2022, 14.06.2023 and 22.11.2023. However, all the notices were returned unserved with the endorsement of the postal authorities that addressee “left”. Therefore, this appeal is disposed of by hearing the learned Departmental Representative.
Learned Departmental Representative submits that assessee declared loss of Rs.17,82,385 under normal provisions and book profit of Rs.42,30,208 under Section 115JB of the Income-Tax Act,1961.
The assessment was completed under Section 143(3) read with section 147 of the Act, determining the loss at Rs.2,82,385 under normal
Act. Learned Departmental Representative further submits that while completing the assessment, the Assessing Officer disallowed Rs.15 lacs under Section 68 of the Act. The Learned DR submits that during the assessment proceedings, the assessee was required to explain the share capital/premium amounting to Rs.15 lacs received by the assessee during the assessment year under consideration from M/s. Attractive Finlay (P) Ltd. managed and controlled by S.K. Jain Group. However, the assessee did not respond to the notice and the questionnaire issued by the Assessing Officer and in the absence of any evidence adduced to prove the genuineness/identity and creditworthiness of the shareholder, the Assessing Officer treated the said amount of Rs.15 lacs as unexplained credit under Section 68 of the Act.
On appeal, the learned CIT (Appeals) sustained the addition.
Heard learned Departmental Representative and perused the record before us. Even before us, the assessee could not produce any evidence to prove that the share capital and premium of Rs.15 lacs received from M/s. Attractive Finlay (P) Ltd. as genuine. No evidences were produced before us to prove the identity and creditworthiness and genuineness of the transaction.
In the circumstances, we do not see any infirmity in the order passed by the learned CIT (Appeals) in sustaining the addition made by the Assessing Officer.
In the result, the appeal is dismissed.