JAY VISAT GLASS INDIA PVT. LTD.,,SURAT vs. THE INCOME TAX OFFICER, WARD-1(3),, SURAT

Assessee by Shri Hemant Suthar – AR Revenue by Ms. Anupma Singla – Sr.DR 13/01/2022 Date of hearing 25/02/2022 Date of pronouncement Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of ld.Commissioner of Income Tax (Appeals)-1, Surat dated 28.03.2016 for the A.Y. 2011-12. The assessee has raised the following grounds of appeal:

1. The Ld. Commissioner of Income Tax (Appeals)-1, Surat has erred in law and in facts in confirming the addition of Rs.2,07,48,000/- being share application money received from shareholders on the ground that the appellant has failed to prove the identity, creditworthiness and genuineness and treated the amount as unexplained cash credit u/s 68 of the I.T.Act. The said addition being illegal and unwarranted and against the applicable facts is prayed to be deleted.

Jaay Visat Glass India Pvt. Ltd., Surat

herein above contained.”

2. Brief facts of the case are that the assessee is a company engaged in the business of manufacturing of Glass. The assessee filed its return of income declaring Nil income. The claimed that they have not commenced the commercial production. The return of income was selected for scrutiny. On verification of return of income, the Assessing Officer (AO) noted that there is introduction of fresh capital and share premium. The AO noted that during the year, the assessee has introduced share capital and share premium of Rs.2.07 crore from 20 share subscribers. The AO in order to verify the transaction issued notice under section 133(6) of the Act to the shareholders on the address furnished by assessee. The AO recorded that all the noticed were returned back with the remark of postal authorities “left” or “not responded”. The assessee confronted with this fact and issued on the share capital and share premium and issued show cause notice as to why it should not be treated as unexplained cash credits within the meaning of section 68 of the Income Tax Act. The AO recorded that in show cause, neither the assessee, nor is represented produced any person for confirmation and for identity and creditworthiness. The AO further recorded that the assessee filed Jaay Visat Glass India Pvt. Ltd., Surat later stating therein that company is not operating since last two years and facing huge losses and not in a position to appoint any accountant due to huge losses and notice under section 13(2) of the Act of Securitisation and Reconstruction of Financial and Enforcement of Security Interest Act, 2002 issued by the lenders bank. The AO accordingly made addition under section 68 of the Act of Rs.2.07 crore.

3. On appeal before the ld.CIT(A), the assessee filed additional evidence consisting list of shareholders and documents related to Eight (08) Shareholders, their affidavits, ID Proofs and Proof of Ownership of agricultural land. The ld.CIT(A) recorded that these affidavits were written in Gujarati Language and identically worded confirming that they had deposited ‘cash’ with assessee-company for share application money and share premium, out of their agricultural income and are not filing return of income. The additional evidence of assessee was admitted. The additional evidence was forwarded to the AO vide letter dated 15.02.2016 with the direction either to make spot enquiry or by issuing commission about the veracity of the affidavits and assessee was asked to produce remaining Twelve (12) shareholders. The AO furnished is interim remand report dated 10.03.2016 wherein the AO recorded that assessee has expressed his inability Jaay Visat Glass India Pvt. Ltd., Surat to produce even a single shareholder. The assessee was again took their stand that assessee company is not operating since Four(04) Years and they are unable to produce shareholder. In absence of evidence, the ld.CIT(A) also held that assessee failed to establish the identity, genuineness and creditworthiness of share capital money and accordingly upheld the addition under section 68 of the Act.

raised by the assessee is dismissed.

8. In the result, appeal of the Assessee is dismissed.

Order announced on 25 February, 2022 in the open court and placing the result on the notice board.