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Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI
ORDER PER ANIL CHATURVEDI, AM:
This appeal filed by the assessee is directed against the order dated 28.04.2011 of the Commissioner of Income Tax (Appeals)-XXI, New Delhi relating to Assessment Year 2004-05.
Brief facts of the case as culled out from the material on record are as under:-
UGS Finance (P.) Ltd. Vs. ITO 2 3. Assessee is a company who filed its return of income for A.Y. 2004-05 on 31.03.2005 declaring loss of Rs.14,127/-. The return of income was initially processed u/s 143(1) of the Act on 29.06.2005. Thereafter, the case of the assessee was reopened by issuing notice u/s 148 of the Act and the reason for issuance of notice u/s 148 of the Act was that the information was received from CEIB which showed that assessee was a fake company and engaged in bringing in bogus Share Capital. During the course of assessment proceedings, AO noticed that during the relevant assessment year, Assessee had raised Share Capital aggregating to Rs.2,65,10,000/- by issuance shares of Rs.10 each at a premium of Rs.90 per share (to the shareholders which are listed at page 2 of the assessment order). Assessee was asked to explain the amount of Share Capital and to prove the identity, creditworthiness and genuineness of the transaction. AO on the basis of the documents filed by assessee concluded that Share Capital introduced by assessee was in the form of bogus Share Capital. He accordingly made its addition of Rs.2,65,10,000/- u/s 68 of the Act and thereby determined the total income at Rs.2,64,95,870/-.
4. Aggrieved by the order of AO, assessee carried the matter before CIT(A). CIT(A) after considering the submissions made by assessee, remand report of the AO, assessee’s reply to remand report and after following the decisions cited in his order concluded that the creditworthiness of the shareholders had UGS Finance (P.) Ltd. Vs. ITO 3 remained unexplained because assessee had failed to substantiate its claim that money had come from the coffers of the shareholders. He accordingly upheld the order of AO.
Aggrieved by the order of CIT(A), assessee is now in appeal before the Tribunal wherein assessee is challenging the reassessment proceedings as well as the addition made on merits.
The case file reveals that the appeal was filed by the assessee in the year 2011. The matter was fixed for hearing several times in the past but there was no appearance on behalf of the assessee nor any adjournment application was filed on those dates. It is also seen that the notice issued by the Registry through RPAD was returned unserved. In case of any change of address, it is for the assessee to file revised Form No.36 duly mentioning the new address. Preferring an appeal does not mean merely formally filing the appeal but also taking all the necessary steps to effectively pursue the appeal. The fact that the assessee has not appeared before Tribunal despite various opportunities granted to the assessee shows that the assessee is not serious in pursuing the appeal filed by him and the negligent approach of the assessee. In the absence of any co-operation from the side of assessee, we don’t find any reason to keep the matter pending before us. Learned DR also stated that the name of the company has been struck off by Registrar of the Companies, Delhi and in support of it he placed on record the copy of the report
UGS Finance (P.) Ltd. Vs. ITO 4 downloaded from the net. Considering the aforesaid facts, we have no option except to dispose of the appeal on merits, after hearing the Ld. D.R.
Before us, Learned DR took us through the findings of AO and CIT(A) and submitted that lower authorities were fully justified in making the addition. He further submitted that before the Tribunal also assessee was not appeared despite various notices issued which shows to prove that the assessee has nothing to say in the matter. Learned DR in his written submission dated 17.05.2023, inter alia submitted as under:
“2. During the year the assessee has received the share capital at a premium of Rs. 90/- from the following parties and miserably failed to discharge the onus that these funds are genuine and accounted money because assessee has neither provided the FTRs, Audited financials etc which is essential to determine the identity of the creditor, the capacity of the creditor and the genuineness of the transaction or have produced any of the directors of the assessee company and also failed to produce the directors of the companies who had advanced these money. It appears that the web of these companies are maintained by a group and this facts can easily be examined from the ROC that who were those directors during the AY and are they employee of that group or actually engaged in any actual activities. This can be said after naming the directors today dated 17.05.2023 who are conduit and connected either with the same address or common director or have remained director in some other company of that group at some point of time.
The assessing officer has made an addition on account of bogus share capital and CIT(A)-21, Delhi has decided the case vide order dated 28.04.2011 by dismissing the appeal of the assessee after thoroughly examining and obtaining the remand report from the AO. The CIT(A) has discussed the nature of entries of sources UGS Finance (P.) Ltd. Vs. ITO 5 of deposits, naming in these parallel accounts. The following account details of all the entities maintained with ABN Amro Bank (Now RBS) has been prepared while deciding the case by the Ld. CIT(A) – S. Acc. No. Another Name A/c open A/c Closed No A/c. Date Date 1 884461 758797 Avail Financial 14.10.2003 09.08.2004 Services (P) Ltd. 2 884321 748947 Lovely Securities 13.10.2003 07.09.2005 Pvt. Ltd. 3 876607 754289 Mehul Finvest Pvt 23.09.2003 06.09.2004 Ltd 4 879024 737096 Smartest 27.09.2003 25.04.2005 Corporate Services P. ltd. 5 798643 748947 Lehra 14.02.2003 29.09.2003 Investments Pvt. Ltd 6 867660 758804 Sarang Securities 30.08.2003 04.08.2004 Ltd 7 916239 707636 Worldlink 26.12.2003 07.09.2005 Telecom Ltd This company SG Fincap Pvt. Ltd. is strike off now. The CIT(A) has found that the all the above company were maintaining double accounts. Cash were deposited in the parallel account and subsequently transferred to another account by way of cheque to show that there is no cash transaction in the account and from that account made the requisite investment.
It is also interesting to note that the assessee company has filed his last B/S on 31.03.2009 before the ROC and it is strike off at present.”
We have heard the Learned DR and perused the material available on record. The issue in the present appeal is with respect to the reopening of the assessment and addition of Share Capital made u/s 68 of the Act. We find that CIT(A) after
UGS Finance (P.) Ltd. Vs. ITO 6 considering the submissions of the assessee, remand report of the AO, assessee’s reply to the remand report and after considering the various decisions cited in his order has upheld the reopening and also on merits has upheld the addition. Before us, no material has been placed by the Assessee to point out any fallacy in the finding of lower authorities. In such a situation, we find no reason to interfere with the order of CIT(A). Thus the grounds of assessee are dismissed.
In the result, appeal of the assessee is dismissed. 9.
Order pronounced in the open court on 24.05.2023