What did the Tribunal hold?

The Tribunal found that the identity of the investors was not in dispute and that the assessee was not given sufficient opportunity to present its case. Therefore, the issue was set aside for fresh adjudication.

The assessee received Rs. 6,00,000 as share capital from close relatives of its director. The CIT(A) confirmed the addition, citing cash receipts and suspicious filing of returns by the investors. The assessee contended that identity was not disputed and sufficient opportunity was not provided.

What were the issues?

Whether the addition on account of share capital was justified without giving sufficient opportunity to the assessee to prove the genuineness of the transaction.

Dutta Automobiles Pvt. Ltd. vs ACIT | ITAT Kolkata 2018

Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH, KOLKATA

Before: Sri J. Sudhakar Reddy & Sri S. S. Viswanethra Ravi]

Assessment Year: 2009-10 Dutta Automobiles Pvt. Ltd..…...……….……………………………………………….…….……...Appellant 7A, Cornfield Road Kolkata – 700 019 [PAN : AACCD 5008 Q] A.C.I.T., Circle-1, Kolkata………….....……………………………………..…………………..…. Respondent Aayakar Bhawan, Annexe 4th Floor Aayakar Bithi City Centre Durgapur (W.B.) Pin – 713 216 Appearances by: Shri V.N. Purohit, FCA, appeared on behalf of the assessee. Shri Arindam Bhattacharjee, Addl. CIT, DR appearing on behalf of the Revenue. Date of concluding the hearing : December 19th, 2017 Date of pronouncing the order : January 5th, 2018

O R D E R Per J. Sudhakar Reddy :-

This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals)-Durgapur, (hereinafter the ‘ld. CIT (A)’), passed u/s 250 of the Income Tax Act, 1961 (the ‘Act’), dt. 28/12/2015, for the Assessment Year 2009-10.

After hearing the rival contentions, we hold as follows:-

Ground No. 1, is dismissed as not pressed.

Ground No. 2, is against the addition of Rs.6,00,000/-, received as share capital by the assessee. The assessee had received the following amount from the close relatives of the Director:-

S.N. Name of the party No. of share allotted Nominal value of each share Total 1 N.C. Dutta 40,000 10 4,00,000/- (Father of the directors) 2 Reena Dutta 5,000 10 50,000/- 3 Chaitali Dutta 5,000 10 50,000/- 4 Anindita Dutta 5,000 10 50,000/- 5 Sangita Dutta 5,000 10 50,000/-

The assessee has produced the copy of return of income, the balance sheet with profit and loss account, in support of the investments, in the case of Narain Ch. Datta, who is the father of one of the Directors. In the case of Mrs. Reena Dutta, who is wife of the Director, returns of income for the Assessment Years 2008-09 & 2009-10, as well as the balance sheets of these years were filed. Similar, is the case with Mrs. Sangita Dutta, Mrs. Anindita Dutta and Mrs. Chaitali Dutta, who are the wives of Directors. The ld. CIT(A), confirmed the addition on the ground that the share application money was received in cash and that the returns of income of all the wives of the Directors, who made investments were filed on the same day i.e., 08/01/2010 and by the same person and that the incomes in all the returns were below taxable limit and they do not show any withdrawals or substantial balance in their bank accounts.

5.1. In our view, the identity is not in dispute. The Assessing Officer cannot doubt the creditworthiness of these parties as the same are supported by their returns of income and balance sheets. The only issue is genuineness. The assessee submits that he can file cash flow statements in support of his case, which are readily available. It was pleaded that sufficient opportunity was not given to the assessee by the Assessing Officer.

5.1.1. The ld. D/R, opposed the same and submitted that no details whatsoever was filed by the assessee earlier.

3 Assessment Year: 2009-10 Dutta Automobiles Pvt. Ltd 6. We find that the entire assessment was substantially done in the months of November and December and the order was passed on 26th December,2010. Thus in our view, sufficient opportunity has not been granted to the assessee. On consideration of these aspects, we are of the opinion that this issue should be set aside to the file of the Assessing Officer for fresh adjudication, in accordance with law, after giving sufficient opportunity to the assessee.

In the result, the appeal of the assessee is allowed for statistical purposes.

Kolkata, the 5th day of January, 2018. Sd/- Sd/- [S.S. Viswanethra Ravi] [J. Sudhakar Reddy] Judicial Member Accountant Member Dated :05.01.2018 {SC SPS} Copy of the order forwarded to: 1. Dutta Automobiles Pvt. Ltd 7A, Cornfield Road Kolkata – 700 019 2. A.C.I.T., Circle-1, Kolkata Aayakar Bhawan, Annexe 4th Floor Aayakar Bithi City Centre Durgapur (W.B.) Pin – 713 216 3. CIT(A)- 4. CIT- , 5. CIT(DR), Kolkata Benches, Kolkata.

DUTTA AUTOMOBILES PVT. LTD.,KOLKATA vs. ACIT, CIR-1, DURGAPUR, DURGAPUR

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