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Facts
The assessee company, engaged in trading, importing, and exporting chemicals and solvents, challenged the disallowance of Rs. 48,00,000 towards share premium and Rs. 1,17,38,520 for bogus purchases made by the Assessing Officer and upheld by the CIT(A). The Assessing Officer treated the share premium and a loan from Swadeshi Merchants Pvt. Ltd. as bogus transactions.
Held
The Tribunal noted that the assessee was non-compliant before the first appellate authority and had failed to provide any written submissions or supporting documentary evidence. In the interest of natural justice, the Tribunal decided to remand the issue back to the CIT(A) for a fresh consideration.
Key Issues
Whether the disallowance of share premium and bogus purchases made by the AO and upheld by the CIT(A) is justified, and whether the assessee has provided sufficient evidence to substantiate its claims.
Sections Cited
250, 143(1), 143(2), 142(1), 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI OM PRAKASH KANT, AM & SMT. KAVITHA RAJAGOPAL, JM
This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) (‘ld.CIT(A) for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2012-13.
The assessee has challenged this appeal on the following grounds: 1. The Learned Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre, Delhi (hereinafter referred to as Ld. CIT(A)) erred in confirming the disallowance made by the Assessing Officer of Rs.48 ,00,000/ being amount received towards Share Premium on issue of equity shares of the appellant company. Your appellant submits that on the facts and circumstances of the case and in law, the share premium is justified and no disallowance is warranted.
(A.Y.2012-13) M/s. Avron Chemicals Pvt. Ltd. vs. ITO 2. The Ld. CIT(A) erred in confirming the disallowance of Rs.1,17,38,520/- made by the Assessing Officer by treating the Purchases as Bogus transaction. Your appellant submits that on the facts and circumstances of the case and in law, the disallowance is not warranted.
The brief facts are that the assessee company incorporated in India and established in the year 2009 is engaged in the business of trading, importing and exporting of chemicals and solvents. The assessee had filed its return of income on 07.09.2012 during the year under consideration, declaring total income at Rs.4,87,300/- and the same was processed u/s143(1) of the Act. The assessee’s case was then selected for scrutiny and notice u/s. 143(2) and 142(1) were duly issued and served upon the assessee.
The ld. Assessing Officer ('A.O.' for short) observed from the balance sheet of the assessee that 20,000 number of shares were issued at face value of Rs.10/- each and premium received was Rs.48 lacs. The ld. A.O. sought for details pertaining to the value of the shares and share premium amount. The ld. A.O. also observed that the assessee has availed loan from Swadeshi Merchants Pvt. Ltd. which did not reflect in its balance sheet that such amount was receivable from the assessee company. The ld. A.O. then treated the said sum as bogus transaction by making an addition on unexplained share money amounting to Rs.48 lacs and bogus transaction of Rs.1,17,38,520/-. The ld. A.O. then passed the assessment order dated 24.03.2015 u/s. 143(3) of the Act, determining the total income at Rs.1,70,25,821/-.
Aggrieved the assessee was in appeal before the first appellate authority who upheld the addition made by the ld. A.O. on the ground that the assessee has failed to substantiate its claim by any supporting documentary evidence.
(A.Y.2012-13) M/s. Avron Chemicals Pvt. Ltd. vs. ITO 7. Aggrieved, the assessee is in appeal before us, challenging the impugned order of the ld. CIT(A).
We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has been non compliant before the first appellate authority and had failed to make any written submission along with any supporting documentary evidence neither before the ld. CIT(A) nor before us. The assessee has not filed any details to substantiate its claim. In view of the principles of natural justice, we deem it fit to remand this issue back to the file of the ld. CIT(A) with the direction that the assessee should co-operate with the proceedings before the first appellate authority without any undue delay.
In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on 29.02.2024.