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Income Tax Appellate Tribunal, DELHI “G” BENCH,
Before: SHRI R.K. PANDA & SMT. BEENA A. PILLAI
PER R.K. PANDA, ACCOUNTANT MEMBER:-
This appeal filed by the assessee is directed against the order dated 04.06.2010 of the CIT(A)-XI, New Delhi relating to A.Y. 2007-08.
Despite service of notice, none appeared for and on behalf of the assessee. Further, it was seen that before the ld. CIT(A) also, the assessee had not appeared, for which he had passed exparte order. Therefore, this appeal is being decided on the basis of material available on record and after hearing the ld. DR.
3. The assessee, in the grounds of appeal, has challenged the order of the ld. CIT(A) in confirming the addition of Rs. 90 lakhs made by the A.O u/s 68 of the Income-tax Act, 1961.
Facts of the case, in brief, are that the assessee is a company, engaged in sale and purchase of shares. During the course of assessment proceedings, the A.O observed that the share capital of the assessee company has increased by Rs. 9 lakhs while there was receipt of share premium to the tune of Rs. 81 lakhs. On being questioned by the A.O, it was submitted that the amount of Rs. 90 lakhs was received from the following seven parties:
Sl. Name Address Amount Cash/ No. Bank 1. Panmad Footwears 10689-690, 15,00,000/- Cash P. Ltd Manakpura, Ram Nagar, New Delhi 2. Lucky Leasing &* B-4/71, Lawrence 15,00,000/- Cash Finacne P. Ltd Road, Delhi 35.
Beauty Electronics P B-4/71, Lawrence 9,50,000/- Cash Ltd Road, Delhi 35.
4. Broad Traders & B-4/71, Lawrence 15,00,000/- Cash Financiers P. Ltd Road, Delhi 35.
5. Pratap Silicamet P. Ltd 10689-690, 15,00,000/- Cash Manakpura, Ram Nagar, New Delhi 6. Ghanshyam Das B-4/71, Lawrence 10,50,000/- Bank
Road, Delhi 35. 7. Vijay Kumar B-4/71, Lawrence 10,00,000/- Bank Road, Delhi 35.
From the various details furnished by the assessee, the A.O observed that in Block B-4 of Lawrence Road, these are Flat Nos like 71A, 71B, 71C and 71D depending upon the floor. There is no Flat number with No. 71 only. The address of the company B-4/71 should probably be B-4/71A only. Since a sum of Rs. 69,50,000/- was received in cash from five parties, the A.O asked the assessee to produce the directors of the above companies. No books of accounts were produced before the A.O. The assessee only filed affidavits of directors before the A.O. On being again asked by the A.O to produce the cash book in original and also the directors of the investing companies, the assessee filed reply that there is no such legal obligation on the part of the assessee. The A.O observed that the auditors of the company are same. The A.O further noted that there were huge cash transactions in the books of the assessee company. According to him, in a metropolitan city like Delhi having all basic banking facilities where there is hardly any cash transaction, the assessee company would still deal in cash for accepting share application and share premium. The same is hardly credible. He observed that address of five of the companies are same as that of the assessee company. In spite of the questionnaire sent on 18.12.2009, no reply was filed by the assessee. Further, as against the closing stock as on 31.3.2007 at Rs. 1,39,50,000/-, total share capital and share premium worked out to Rs. 1,39,45,000/-. Therefore, the assessee
was in dire need of money desperately to accommodate those companies whose shares were allegedly purchased and kept by it as closing stock as on 31.3.2007. The A.O further observed that in two cases, the amounts were received by cheque but no bank statements were furnished inspite of repeated requests from his side. Since the assessee failed to produce the original books of accounts to verify the genuineness of the transactions and also failed to prove the identity of the persons who had given credits, the A.O held that the assessee has failed to discharge the onus of genuineness of the transaction and creditworthiness of the entities from where the credit has been appearing in the books of accounts of the assessee. According to him, mere submission of PAN and bank statements of the two persons would not be sufficient for this purpose. Relying on various decisions, he made addition of Rs. 90 lakhs u/s 68 of the Act as unexplained credits in the books of the assessee.
Since there was no appearance before the ld. CIT(A) and no material was produced before him to controvert the findings given by the A.O, the ld. CIT(A), relying on various decisions upheld the action of the A.O in making addition of Rs. 90 lakhs u/s 68 of the Act. While doing so, he observed that in spite of repeated requests, the assessee failed to furnish the credit worthiness before the A.O at various stages of assessment. Further, it is not known as to how the amount of Rs. 90 lakhs was received as share capital/premium from the seven persons. He observed that there is no Rs. 69,50,000/- in cash when there was adequate banking facility at Delhi. Since the identity and capacity of the subscriber was not established and genuineness of the transaction could not be proved, the ld. CIT(A) held that the assessee has not discharged the onus cast on him to prove the identity and credit worthiness of the creditors and genuineness of the transaction. He accordingly upheld the addition made u/s 68 of the Act. Under the afore mentioned circumstances, we do not find anything wrong in the order of the ld. CIT(A) sustaining the addition made by the A.O. Since the order of the ld. CIT(A) is a reasoned one, therefore, under the facts and circumstances of the case, we uphold the same. Grounds raised by the assessee are accordingly dismissed.
In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 17.04.2017.