M/S. ASTBHUJA COMMERCIAL PVT. LTD.,KOLKATA vs. ITO, WARD - 4(3), KOLKATA, KOLKATA

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ITA 1153/KOL/2018Status: DisposedITAT Kolkata19 November 2018AY 2013-143 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the ex-parte order of the CIT(A) and restored the matter to the AO for fresh adjudication. The assessee was granted one more opportunity to explain the share capital, subject to payment of costs.

What were the facts?

The assessee company received share capital and premium amounting to Rs. 2,08,00,000/-. The Assessing Officer treated this as unexplained cash credits as shareholders did not appear in response to summons. The assessee's appeal before the CIT(A) was dismissed ex-parte due to non-compliance.

What were the issues?

Whether the share capital received by the assessee can be treated as unexplained cash credits without providing an opportunity to explain. Whether the assessee's non-compliance warrants dismissal of the appeal.

Which sections of the Income-tax Act were involved?

Section 131,Section 143(3),Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA BENCH (D

Before: Shri P.M. Jagtap & Shri S.S. Viswanethra Ravi, JM]

order

: November 19, 2018 ORDER

Per P.M. Jagtap, Vice President

1.

This appeal filed by the assessee is directed against the order of Ld. CIT(A) – 7, Kolkata dated 23.01.2018 passed ex-parte whereby he dismissed the appeal of the assessee.

2.

The assessee in the present case is a company which filed its return of income for the year under consideration on 28.02.2014 declaring a total income of Nil. During the course of assessment proceedings, summons u/s 131 were issued by the A.O. to the concerned shareholders who had contributed to the share capital of the assessee company to the tune of Rs. 2,08,00,000/- including the share premium amount of Rs. 1,91,36,000/-. None however appeared before the Assessing Officer in response to the said summons. Some summons were also returned undelivered by the postal authority

Assessment Year: 2013-14 M/s. Astbhuja Commercial Pvt. Ltd. with the remark “insufficient address”, “not known” etc. This position was confronted by the A.O. to the assessee company giving it an opportunity to produce the concerned shareholders for examination. The assessee however failed to avail this opportunity. The A.O., therefore, treated the entire share capital of Rs. 2,08,00,000/- claimed to be received by the assessee company during the year under consideration as unexplained cash credits and made addition to that extent to the total income of the assessee in the assessment completed u/s 143(3) vide an order dated 07.03.2016.

3.

Against the order passed by the A.O. u/s 143(3), an appeal was preferred by the assessee before the Ld. CIT(A) 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(A) dismissed the appeal of the assessee vide his appellate order dated 23.01.2018 passed ex-parte.

4.

We have heard the arguments of both the sides and also perused the relevant material available on record. Although the learned counsel for the assessee has submitted that the assessee company now is in a position to explain the relevant cash credits representing share capital in terms of section 68 and has sought one opportunity by sending the matter back to the A.O., we are of the view that such opportunity can justifiably be given to the assessee only subject to a payment of cost of Rs. 5,000/- keeping in view the casual and negligent approach of the assessee in complying with the notices issued by the A.O. and CIT(A). We accordingly set aside the impugned order of the Ld. CIT(A) passed ex-parte and restore the matter to the Assessment Year: 2013-14 M/s. Astbhuja Commercial Pvt. Ltd. file of the A.O. for deciding the same afresh after giving one more opportunity to the assessee to explain the relevant cash credits representing share capital in terms of section 68 by producing the necessary supporting documentary evidence subject to a payment of cost of Rs. 5,000/- to the Income Tax Department.

5.

In the result, the appeal of the assessee is treated as allowed for statistical purpose. Order Pronounced in the Open Court on 19th November, 2018.

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