M/S KALYANI BARTER PVT. LTD.,KOLKATA vs. DCIT, CIR-2(1),, KOLKATA

This appeal filed by the assessee pertaining to the Assessment Year (in short “AY”) 2012-13 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)-1, Kolkata [in short ld. “CIT(A)”] dated 22.01.2019 arising out of the assessment order passed u/s 143(3) of the Act by Ld. DCIT, Circle-2(1), Kolkata.

Assessee has effectively raised four grounds of which two relate to addition u/s. 68 of the Act on account of unexplained share capital and unsecured loan, one relates to disallowance u/s. 14A of the Act and through ground no. 4 it has claimed that the order passed by Ld. CIT(A) u/s. 250 of the Act is not correct confirming the arbitrary disallowances/additions.

At the outset, Ld. Counsel for the assessee submitted that the documents referred in paper book containing 239 pages filed on 15.06.2023 were not placed before the lower authorities for necessary examination. These documents are vital for the purpose of examination of the nature and source of the alleged sum. The prayer was further made that one more opportunity may be granted by restoring the issue raised on merits to the Ld. CIT(A) for fresh adjudication after considering the documents filed in the paper book. On the other hand, ld. DR submitted that the major addition is regarding unexplained cash credit in the form of share capital/share premium and unsecured loan which the assessee has taken from paper company/ shell company/ accommodation entry provider and Jama Kharchi Companies and assessee failed to explain the nature and source of the same as mandated u/s. 68 of the Act.

We have heard the rival submissions and carefully gone through the records placed before us. We note that the assessee is a Private Limited Company engaged in the business of shares and securities. It declared loss of Rs.2,13,39,135/- in the return of income for AY 2012- 13 furnished on 16.09.2012. After the case being selected for scrutiny through CASS and validly serving notices u/s. 143(2) and 142(1) of the Act, the assessee was asked to explain the source of share capital and share premium amounting to Rs.6.55 Cr. as well as nature and source of unsecured loan of Rs.1.27 Cr. Though submissions were made by the assessee but complete details were not filed which resulted in the addition of the alleged sum along with other minor additions and income assessed at Rs.5,69,77,411/-.

When the matter travelled before the Ld. CIT(A), though the assessee filed statement of facts but did not file the evidence which were necessary for pleading the grounds of appeal. Ld. CIT(A) at page Kalyani Barter P. Ltd. 4 of the impugned order has observed that “in case assessee deliberately and intentionally failed to produce evidence before the AO with a desire to prevent enquiry or investigation an adverse view should be taken.” Further, at para 19 of the impugned order, ld. CIT(A) observed that “in the case in hand no details were filed before the Ld. AO. He had been stopped from making any further investigations. It is evident that the assessee had failed to prove the identity, genuineness and creditworthiness of the people having given loans.”