MONALISA ENCLAVE PRIVATE LIMITED. ,KOLKATA vs. ITO, WD-1(2), KOLKATA. , KOLKATA

This appeal filed by the assessee pertaining to the Assessment Year (in short ‘AY’) 2017-18 is directed against the order passed u/s 250 of the Income Tax Act, 1961 (in short the ‘Act’) by ld. Commissioner of Income-tax (Appeals)- NFAC, Delhi [in short ld. ‘CIT(A)’] dated 31.08.2023 arising out of the assessment order framed u/s 143(3) of the Act dated 19.12.2019.

The brief facts of the case are that the appellant being a company had filed its return of income for the AY 2017-18 declaring total income of Rs. ‘NIL’. The case was selected for scrutiny assessment under CASS, notice u/s 143(2) of the Act was issued. In compliance to the statutory notice, the I.T.A. No.: 1071/KOL/2023 Assessment Year: 2017-18 Monalisa Enclave Private Limited. appellant company submitted the details through e-proceeding. Thereafter, income of the appellant was assessed u/s 143(2) of the Act at total income of Rs. 15,27,000/- by making addition as unexplained credit u/s 68 of the Act and disallowance of expenses of Rs. 23,000/-. 2.1. The appellant preferred appeal before ld. CIT(A) whereat he submitted his submission but ld. CIT(A) has dismissed his appeal thereby holding that the addition to the income of Rs. 15,04,000/- is found to be on sound factual and legal position. Being aggrieved and dissatisfied with the said order the present appeal has been preferred. 2.2. The ld. Counsel for the assessee challenges the impugned order thereby submitting that the order of ld. CIT(A) and the ld. AO is bad both on facts as well as law as the appellant has submitted the entire documents relating to M/s. Rasili Barter Pvt. Ltd. that goes to establish the identity of the person and the shareholder, creditworthiness of the transaction and genuineness of the transaction. Even though ld. AO and ld. CIT(A) had added the share capital of Rs. 15,04,000/- as unexplained share capital. The ld. Counsel for the assessee further submits that the assessee/appellant can not force the director of M/s. Rasili Barter Pvt. Ltd. to appear before the AO or the ld. CIT(A) though the appellant had already discharged his duty by submitting all those documents which were required by the AO and asked to submit to the assessee. The ld. Counsel for the assessee has filed documents relating to M/s. Rasili Barter Pvt. Ltd. 3. Contrary to that it had been argued by the ld. D/R that identity, creditworthiness of the appellant company were documentary and personal appearance by the directors of the applicant company have been avoided. So, the questions asked by the AO remained unanswered and accordingly, he supports the impugned order of ld. CIT(A).

After hearing rival submissions of the Counsels of the respective parties, we have perused the order of the AO and ld. CIT(A) and find the following facts: i) Before the AO after verification of the reply received from one of the share allottees i.e. M/s. Rasili Barter Pvt. Ltd. was asked to submit following details; (a) Copy of share application (b) Copy of share allotment letter (c) Copy of share certificate. ii) M/s. Rasili Barter Pvt. Ltd. was directed to appear at the office personally to explain the details of transaction with the assessee along with documents. 4.1. It is averred the AO’s order that no one appeared on behalf of M/s. Rasili Barter Pvt. Ltd. nor the assessee company produced evidences required to substantiate transaction with M/s. Rasili Barter Pvt. Ltd. Ld. AO has held that assessee has failed to discharge the onus to provide a transaction being a genuine transaction. On perusal of the order of ld. CIT(A), it appears to us that appellant has produced the following documents: i) Income tax acknowledgement for AY 2017-18. ii) Copy of share application. iii) Copy of audited accounts along with all the annexures. iv) Bank statements for the relevant periods of transaction of the share application related to M/s. Rasili Barter Pvt. Ltd. 4.2. Ld. CIT(A) after going over the documents has held thus: The facts in the case show that the submission of the identity, creditworthiness of the applicant company were documentary and personal appearance of the directors of the applicant company have been avoided. Due to the same, the nature of business of the applicant company, its track record of profitability, reasons for investment in appellant company and such other questions remained unanswered.

The above all those documents relate to M/s. Rasili Barter Pvt. Ltd. Keeping in view the above documentary evidences and the facts stated above we are thus, in this view that the case is again remanded back to the file of ld. CIT(A) to pass a fresh order after going over the entire papers which has been filed by the assessee to support their creditworthiness and genuineness of the transaction without shifting any onus upon the assessee to produce the director of the company such as M/s. Rasili Barter Pvt. Ltd. Accordingly, the case is allowed for statistical purposes.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 12th June, 2024. Sd/- Sd/- [Manish Borad] [Pradip Kumar Choubey] Accountant Member Judicial Member Dated: 12.06.2024 Bidhan (P.S.) Copy of the order forwarded to: