M/S SUVIDHA BARTER PVT. LTD.,KOLKATA vs. ITO, WD-5(4), KOLKATA, KOLKATA

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ITA 969/KOL/2016Status: DisposedITAT Kolkata05 September 2018AY 2008-093 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found it appropriate to remand the matter back to the AO for fresh inquiries. These inquiries included examining the genuineness and source of share capital for all shareholders and the reasons for any change in directorship.

What were the facts?

The assessee's appeal concerned an addition made under Section 68 for unexplained cash credit. The CIT(A) had confirmed the addition. The assessee argued they did not have an opportunity to produce all directors/shareholders before the AO.

What were the issues?

Whether the CIT-A was justified in confirming the addition under Section 68 for unexplained cash credit, and whether the assessee was provided with adequate opportunity to present evidence.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH: KOLKATA

Before: Shri J. Sudhakar Reddy & Shri S.S. Viswanethra Ravi

ORDER Shri S.S. Viswanethra Ravi

This appeal by the Assessee is directed against the order of the Commissioner of Income Tax (Appeals), 2, Kolkata dt. 22-12- 2015 for the A.Y 2008-09.

2.

The only issue is to be decided as to whether the CIT-A justified in confirming the addition/disallowance made u/s. 68 of the Act on account of unexplained cash credit in the facts and circumstances of the case.

3.

After hearing both the parties, it is noted that the CIT under 263 proceedings directed the AO to conduct the assessment proceedings as detailed therein of para 2 of the assessment order and to make fresh assessment. But, in response to notice issued u/s. 131 no directors/the shareholders of the assesse company could not be produced before the AO. Before us the ld. AR submits that there was no opportunity before the AO to produce the details of all the directors/ the shareholders of the assessee company before the AO. Therefore, taking into considerations the submissions of the ld.AR & Ms. Suvidha Barter Pvt. Ltd. ld. DR, facts and circumstances of the case and in the interest of justice, we deem it fit and proper to remand the matter to the file of the AO to conduct inquiries as set out hereunder:-

i) Examine the genuineness and source of share capital, not on a test check basis, but m respect of each and every shareholder by conducting independent enquiry not through the assessee. The bank account of the entire period should be examined in the course of verification to find out the money trail of the share capital. ii) Further the A. 0. should examine the directions as well as examine the circumstances which necessitated the change in directorship if applicable. He should examine them on oath to verify their credentials as director and reach a logical conclusion regarding the controlling interest. iii) The A. O. is directed examine the source of realization from the liquidation of assets shown in the balance sheet after the change of Directors, if any."

4. In view of the above, grounds raised by the asessee are allowed for statistical purposes.”

4.

In view of above, we deem it fit and proper to remand the issues to the file of AO and to pass a fresh order as per law, after giving the assesse adequate opportunity of hearing to assessee. The assesse is at liberty to file necessary evidences/explanation in support of its claim/contention. Grounds raised by the assesse are allowed for statistical purpose.

5.

In the result, the appeal of assesse is allowed for statistical purposes Order pronounced in the open court on 05-09-2018

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