Income Tax Appellate Tribunal - Kolkata
Gulmohar Distributors Pvt. Ltd., ... vs I.T.O.,Ward-9(2), Kolkata on 9 June, 2023
IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH KOLKATA
BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER
AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER
ITA No.270/Kol/2020
Assessment Year: 2009-10
Gulmohar Distributors Pvt. Income Tax Officer, Ward-
Ltd., 396/4C, NSC Bose 9(2), Kolkata
Vs.
Road, 1st Floor, P.O. Naktala,
Kolkata-700047.
(PAN: AADCG2885K)
(Appellant) (Respondent)
Present for:
Appellant by : Shri S. M. Surana, Advocate
Respondent by : Smt. Ranu Biswas, Addl. CIT, DR
Date of Hearing : 03.05.2023
Date of Pronouncement : 09.06.2023
ORDER
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of Ld. CIT(A)-12, Kolkata vide Appeal No. 84/CIT(A)-12/Kol./Ward- 9(2)/2016-17 dated 10.07.2017 passed against the assessment order by ITO, Ward-9(2), Kolkata u/s.143(3)/147/263/144 of the Income- tax Act, 1961 (hereinafter referred to as the "Act"), dated 20.03.2015.
2. Grounds raised by the assessee are reproduced as under:
1. (a) For that upon the facts and circumstances of the case the Ld CIT(A) was not justified in confirming the addition of Rs. 5,13,00,000/- under section 68 of Rs. 3,00,28,540/- of the Income Tax Act 1961.
(b) For that upon the facts and circumstances of the case and in law Ld CIT(A) was not justified in confirming addition made by AO when the Assessee satisfies the identity of the third party and also supplies such other evidence like bank statements showing the impugned transactions and financial statements, returns of income of the lender which will show, prima facie, that the entry is not fictitious the initial burden which lies upon 2 ITA No. 270/Kol/2020 Gulmohar Distributors Pvt. Ltd.
AY 2009-10 him can be said to be discharged by him and that the burden shall then shift to the revenue to prove the contrary with sufficient and adequate material.
(c) For that Upon the facts and circumstances of the case and in law action of CIT(A) confirming the addition in hand of appellant was not justified and same should have been made in the hands of the share subscribers and not the Appellant in the light of the Appellant discharging the initial onus placed upon it."
3. At the outset, it is noted that present appeal is barred by limitation by 902 days for which petition for condonation of delay along with affidavit is placed on record. It is noted that order of Ld. CIT(A) dated 10.07.2017 was received by the assessee on 15.07.2017 and the due date of filing the present appeal was 13.09.2017, which in fact has been filed on 03.03.2020. In the petition for condonation of delay, it is stated that director of the assessee relied upon the professional competency of its authorised representative for taking appropriate action as the director was not competent to understand and deal with the taxation matters of the assessee company. Authorised representative inadvertently missed to file the appeal in time for which an affidavit by the authorised representative explaining the reason is also placed on record. It is submitted that there is no benefit to the assessee in filing the appeal belatedly. We have gone through the petition and the affidavit placed on record.
3.1. We have duly considered rival contentions and gone through the record carefully. Sub-section 5 of Section 253 contemplates that the Tribunal may admit an appeal or permit filing of memorandum of cross-objections after expiry of relevant period, if it is satisfied that there was a 'sufficient cause' for not presenting it within that period. Similarly, the phrase 'sufficient cause' has been used in section 5 of Indian Limitation Act, 1963. Whenever interpretation and construction of this expression has fallen for consideration before Hon'ble High Courts as well as before the Hon'ble Supreme Court, then, Hon'ble 3 ITA No. 270/Kol/2020 Gulmohar Distributors Pvt. Ltd.
AY 2009-10 Courts were unanimous in their conclusion that this expression is to be used liberally. We may make reference to the following observations of the Hon'ble Supreme Court from the decision in the case of Collector Land Acquisition Vs. Mst. Katiji& Others, 1987 AIR 1353:
"1. Ordinarily a litigant does not stand to benefit by lodging an appeal late.
2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties.
3. "Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner.
4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay.
5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk.
6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so."
3.2. Similarly, we would like to make reference to authoritative pronouncement of Hon'ble Supreme Court in the case of N.Balakrishnan Vs. M. Krishnamurthy [1998] 7 SCC 123 (SC). It reads as under:
"Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life-span for such 4 ITA No. 270/Kol/2020 Gulmohar Distributors Pvt. Ltd.
AY 2009-10 legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finislitium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi lain Vs. Kuntal Kumari [AIR 1969 SC 575] and State of West Bengal Vs. The Administrator, Howrah Municipality [AIR 1972 SC 749]. It must be remembered that in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time then the court should lean against acceptance of the explanation. While condoning delay the Could should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss."
3.3. We do not deem it necessary to recite or recapitulate the proposition laid down in other decisions. It is sufficed to say that Hon'ble Courts are unanimous in their approach to propound that whenever reasons are assigned by an applicant for explaining the delay, then such reasons are to be construed with a justice-oriented approach.
3.4. In the light of above, if we examine the facts then it would reveal that there is a delay of 902 days in filing of the appeal by the assessee which is attributable to the lapses on the part of the authorised representative engaged by the assessee. Income-tax law is a complex 5 ITA No. 270/Kol/2020 Gulmohar Distributors Pvt. Ltd.
AY 2009-10 subject and meeting its compliance requirements is dependent on services by experts of the subject matter. Assessee was dependent on the authorised representative engaged by it who has owned up the mistake and explained the delay by furnishing an affidavit, placed on record. Considering this fact with a justice-oriented approach, we condone the delay and take up the matter for appropriate adjudication.
4. This case was heard on 16.11.2022 and order was reserved. However, certain clarifications were required for which it was refixed for hearing. Ld. Sr. DR was directed to produce assessment records including relating to the assessment carried out under section 147 rws 143(3) of the Act. The same were produced. Ld. Counsel for the assessee was permitted to examine the same in the presence of ld. Sr. DR and to supply copies of documents, if any, required from the same, for the purpose of supporting his claim in the present appeal. Ld. Counsel made submission thereafter and the case was heard.
5. Brief facts of the case are that assessee filed its return of income on 07.09.2009 reporting a total income at'nil' which was processed u/s. 143(1) of the Act. Subsequently, case was reopened and assessment was completed u/s. 147 read with sec. 143(3) of the Act vide order dated 30.08.2011, determining total income at Rs.63,500/-. While making this assessment, Ld. AO in his order, in para 3 had observed as under:
"During the course of hearing, on going through the details submitted by the assessee it was noticed that during the year the assessee company issued 1,02,400 no. of equity share with a face value of Rs.10/- along with a premium of Rs.490/- per share. To verify the transactions, notices u/s. 133(6) of the Act were issued to some of the share applicants on test check basis."
5.1. Late r on, ld. CIT Kolkata-III, Kolkata called for the assessment records and came to the conclusion that proper 6 ITA No. 270/Kol/2020 Gulmohar Distributors Pvt. Ltd.
AY 2009-10 enquiries and examinations were not conducted by the ld. AO in order to verify the genuineness and source of share capital as well as ide ntity and creditworthiness of the shareholde rs, which rendered the assessment order erroneous in so far as prejudicial to the interest of the revenue for which an order u/s. 263 of the Act was passed on 10.03.2014.
5.2. In this case, asse ssee had issue d 1,02,400 shares of Rs. 10/- each, at a premium of Rs.490/- per share to ten share subscriber companies and has thus, raised share capital amounting to Rs.5,13,00,000/- including share pre mium of Rs.5,01,76,000/-. Details of the ten share subscriber companies furnished before the ld. AO is tabulate d as under:
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AY 2009-10 5.3. To give e ffect to the revisionary order of ld. CIT passed u/s. 263 of the Act,ld. AO issued notice u/s. 142(1), calling 8 ITA No. 270/Kol/2020 Gulmohar Distributors Pvt. Ltd.
AY 2009-10 for details of docume nts and explanations in respe ct of share capital of Rs.5.13 Cr. raised during the year. Summons u/s. 131 dated 26.02.2015 were issued to the directors of the assessee as well as all the share subscribers. Owing to non- compliance,ld. AO proceeded to conclude the assessment u/s 144 rws 263 vide order dated 20.03.2015,by treating the share subscribed amount of Rs.5.13 Cr. as unexplained cash credit u/s. 68 of the Act and assessed the total income at Rs.5,13,63,500/-. Aggrieved, asse ssee went in appeal before the ld. CIT(A) who dismissed it since no compliance was made by the assessee on various notices issued for fixing the hearing. Ld. CIT(A) held that he has no reason to interfere with the decision of the AO since no concrete evidence has been brought on record to controvert the same. Aggrieved,assessee is in appeal before the Tribunal.
6. Before us, ld. Counsel emphasized on the fact noted in the first assessment completed u/s. 147 read with section 143(3), dated 30.08.2011 wherein ld. AO has carried out investigation into the transaction of share capital and share premium raised by the assessee during the year under consideration by issuing notices u/s. 133(6) of the Act, dated 29.04.2011to three share subscribing companies out of total ten, on test check basis. Copy of one such notice issued is extracted below so as to demonstrate the details called for by the ld. AO from the investor company.
9 ITA No. 270/Kol/2020Gulmohar Distributors Pvt. Ltd.
AY 2009-10 10 ITA No. 270/Kol/2020 Gulmohar Distributors Pvt. Ltd.
AY 2009-10 6.1. Ld. Counsel stated that the notices were duly complied by the three investor companies by furnishing the desired de tails called for, duly acknowledged by sealed stamp of the office of ITO, Ward-9(2), Kolkata dated 19.05.2011.Copies of the same are placed in the paper book (volume 2) from page 18 to 59. He submitted that in this assessme nt, ld. AO has taken note of the fact that all the de tails were furnished to prove identity and creditworthiness of the investors and the genuine ness of the transactions.Set of documents and de tails furnished by one such investor company in response to notice u/s 133(6) dated 29.04.2011 are reproduced herein for e ase of reference:
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AY 2009-10 6.2. Re fere nce was made to the most clinching evidence of positive report of the Inspector, dated 20.07.2011 wherein it is recorde d by the Inspector that companies mentioned in his report were traced at their addresses and he had verified the de tails and documents with no discrepancy found. The said report of the Inspector is extracted be low for ready reference:25 ITA No. 270/Kol/2020
Gulmohar Distributors Pvt. Ltd.
AY 2009-10 6.3. Ld. Counsel also stated that Ld. AO had called for de tails from the assessee in respect of all the 10 investors during the course of assessment under section 147 which were duly furnished and are on record. Without prejudice to the conte ntion of the ld. Counsel as to failure on the part of the ld. AO in complying with the directions given by the ld.
CIT in order passed u/s 263, it was submitted that since report of the Inspector was a positive one for the three investors which the ld. AO had chosen for the purpose of enquiry, there was no occasion for the ld. AO to go to the 26 ITA No. 270/Kol/2020 Gulmohar Distributors Pvt. Ltd.
AY 2009-10 exte nt and manner of enquiry as desired by the ld. CIT to meet his expe ctations for which he has held the assessment order as erroneous in so far prejudicial to the intere st of the revenue. He submitted that it is important to understand the relevancy and meaningfulnessof the e nquiry expecte d by the ld. CIT when a positive report of the Inspector is already on record.
6.4. Ld. Counse l further submitted that ld. AO in the impugned assessment has made the addition towards subscription of its share capital merely on the basis of direction given by the ld. CIT in para 17 and 18 of the revisionary order passed u/s. 263 of the Act which is reproduced as unde r:
"17. In this c ase the AO h as comple ted the assessmen t u/s. 143(3) read with 1 47 withou t conduc ting comple te enquir y in to the subscr iption of the share c apital and the large amoun t of pre miu m dur ing the ye ar and/or by relying on the ev ide nces produced bef ore him with out conducting independent enquir ies in to all the subscr ibers of the share c apital. The AO has also no t conduc ted any enquir ies in to the var io us layer s through wh ich the money has been ro tated f or br inging it ul timate ly in the assessee co mpany as subscr ip tion to the share c apital. The duty of the AO beco mes even more onerous spec ially in v ie w of the f ac t that the modus oper andi adopted by the assessee has been repeated in larg e nu mber of cases comple ted by the same AO.
18. In v ie w of the above, the order passed by the AO is errone ous and pre jud ic ial to the in terest of revenue & hence, the order passed by the AO is set aside with the d ire c tion th at he/she should pass the assessmen t order af ter conduc ting ind epe nden t de tailed and co mp le te enqu ir ies in to the subs cr ip tion to the sh are c ap ital and pre miu m to the exte nt of Rs. 5.12 crores in tr oduced in th is c ase. The AO should tr ace the source of share capital b y enqu ir ing in to the var ious layers thr ough which the money has been in troduced in th is co mpany as share c apital and als o examine the ' direc tors of subscr iber co mpanies by issuing summons u/s 131 of the I.T.Ac t. The AO should send inf or ma tio n to the AOs hav ing jur isdic tion over the subscr iber co mpan y to the share capital reg arding its investment in to sh are c apital and pre mium paid. Th e AO shou ld conduc t independen t enquir ies to ver if y the docu men ts 'f iled bef ore h im in respec t of proof of subscr iption to share- c apital. The AO should no t co nf ine himself 27 ITA No. 270/Kol/2020 Gulmohar Distributors Pvt. Ltd.
AY 2009-10 to co nducting enqu ir ies in to the subs cr ibers to the shar e c apital only on se le c tive bas is . The A.O. should also c all upon the assessee to iden tif y the persons who are sho wn as d ir ec tors of the assessee co mp an y and examine them o n o ath to ver if y their creden tial as direc tors. The AO should pass spe aking or der af ter prov id ing re ason able oppor tunity to the assessee and ver if ying the source of share capital inc luding the share pre mium of all the subscr ibers and ro tatio n of money thro ugh var ious hands so as to ascer tain the true na ture of tr ansac tion wh ich will br in g to the f ore, the re ality of the tr ansac tio ns.
Hence the order passed by the AO u/s 143(3) r/ w See 147 of the I Tax Ac t '61 f or the AY 2009-10 is set aside to be f rame d de-novo as per law."
6.5. Ld. Counsel thus, strongly submitted that even though this assessment was subjected to revisionary proceedings u/s. 263 of the Act,ld. AO had all the records before him in respect of replies furnished against notice issued u/s. 133(6) of the Act as well as furnished by the assessee which ought to have been conside re d while passing the impugne d order u/s. 143(3)/147/144 of the Act. Ld. Counse l also pointed out to the fact that details and documentsof all the 10 share subscribing companies were furnished before the Ld. CIT in the course of revisionary proceedings also and the refore, were available on record for the Ld. AO to consider the same while passing the impugned assessment order which he failed to do so.
6.6. Ld. Counse l also submitted that ld. AO has issued summons u/s. 133 in the present proceedings, dated 26.02.2015 to all the share subscribing companies which were not returned as unserved. According to the Ld. Counsel, as per order shee t entries, notice under section 142(1) was issue d on 08.09.2014 with one reminder issued on 27.11.2014 and per entry dated 06.02.2015 for issue of 28 ITA No. 270/Kol/2020 Gulmohar Distributors Pvt. Ltd.
AY 2009-10 summon which in fact were issued on 26.02.2015 that to at the fag-end of the year without any further follow-up and reminde rs. He submitted that summons were issued on 26.02.2015 and the impugned assessment order was passed on 20.03.2015 i.e. within 21 days.
6.7. He further stated that mere non-appearance of directors is no basis for invoking the provisions of section 68 of the Act for which he placed reliance on the decision of Hon'ble Supreme Court in the case of CIT vs. Orissa Corporation Pvt. Ltd. [1986] 159 ITR 78 (SC,) wherein it was held as under:
"In this c ase the as sessee had given the n ames and add resses of the allege d creditor s. It was in the kn owledge of the rev enue that the s aid cred itors were the in co me - tax assessees. T he ir index number was in the f ile of the revenue. The revenue, apar t f rom issuing no tices under s ection 131 at the ins tance of the asse ssee, d id no t pursue the ma tter f ur ther. Th e revenue d id no t examine the source of inco me of the said al leged cred itors to f ind out whe the r they were credit- wor thy or we re such who could adv an ce the alleged lo ans. There was no effor t made to pursue the so- c alled alleged cre ditors. In those circums tan ces, the assessee could no t do any f ur ther. In the pre mises, if the T r ib unal came to the conc lus ion th a t the assessee had discharged the bur den that lay on him, then it could no t be s aid that such a con clus ion was unreasonab le or perverse or based on no evidenc e. If the conc lus ion was based on so me evide nce on wh ich a co nc lus io n could be arr ived a t, no question of law as such could ar is e.
The High Cour t was, th eref ore, right in ref using to r ef er the ques tions sough t f or. Decis io n of the H igh Cour t af f irme d."
7. Per contra, ld. Sr. DR submitted that assessee failed to comply with the summons issued u/s. 131 of the Act which qualifies the addition made by the ld. AO. It was submitted that though the directions given by the ld. CIT in the order passed u/s. 263 was not followed, however, the addition so made is correct and ought to be upheld. It was also contended that furnishing plethora of documents and flawless paper work compliance is of least significance if the 29 ITA No. 270/Kol/2020 Gulmohar Distributors Pvt. Ltd.
AY 2009-10 assessee fails to comply with the summons issued u/s 131 of the Act.
8. We have heard the rival contentions and gone through the records.It is an undisputed fact as borne out from the records that in the course of assessment proceedings u/s 147 rws 143(3), ld. AO had made enquiries in respect of share capital raised by the assessee during the year under consideration and a report from the Inspector is also placed on record in respect of three investor companies, already extracted above. Assessee had furnished all the relevant documents and details in the course of said assessment proce edings as well as during the revisionary proce edings, for all the ten investor companie s, which are on record. These documents and details are also placed in the paper books furnished by the Ld. Counsel in the present appeal.
9. From the perusal of impugned assessment order, it is observed that it is an order which has summarily disposed the direction given by the Ld. CIT. In this order, after giving background of the litigation, ld. AO mentioned about the issue of notices under section 142(1) and summons u/s 131 of the Act and their non-compliance to pass the order ex parte. These observations are reproduced as under:
"In co mp lian ce to the direc tions of the Ld. C IT, Ko lkata- III, no tice u/s 142(1) of the Ac t was issued to the assessee co mpany requir ing it to appe ar bef ore the under s igned, e ither personally or through its author ised represen tative, and f urnish cer ta in de ta ils. Summon u/s 131 of the Ac t was also issued to the d irec tors of the co mp any f or their personal a ttendanc e. Ho wever, ne ithe r an yone on behalf of the assessee nor the direc tors of the assessee co mp any appe ared bef ore the unders ig ned till d a te. Su mmons u/s 131 of the Ac t wer e also issued to the d irec tors of the s ubscr iber co mp anies, as c laimed by the assessee in the c ourse of assess men t proceeding, f or their personal atte nd ance. O nce ag ain none of the d irec tor s of the subscr iber co mpanies appe are d bef ore 30 ITA No. 270/Kol/2020 Gulmohar Distributors Pvt. Ltd.
AY 2009-10 the unders igned til l date. Since there was no co mplianc e on the par t of the direc tor s of the assessee company or the d ir ec tors of the subscr iber companies, there is no option but to pass the order ex par te. "
9.1. After the above stated observations, ld. AO made reference to decision of Hon'ble jurisdictional High Court in the case of CIT vs. Precision Finance Pvt. Ltd. [208 ITR 463] and in the case of CIT vs. Nipun Builders & Developers Pvt. Ltd. 30 taxmann.com 292 (Del) by Hon'ble Delhi High Court. Thereafter, without taking into account the material already on record in the form of report of the Inspector, details and documents furnished by the three investor companies in response to notices issued under section 133(6) as well as de tails and documents furnished by the assessee for the ten investor companies in the assessment proceedings u/s 147 rws 143(3) and the submissions made by the asse ssee before the ld. CIT in the course of revisionary proceedings, arrived at a finding that when the subscribing companies h ave not been f ound existing at the addresses given by the assessee, it is open to the AO to hold that the identity of the sh are subscribers has not been proved, let alone their creditworthiness and the genuineness of the transactions. With this finding, Ld. AO made a narrative on section 68 couple d with reference to certain judicial precedents. He thus, concluded the assessment by stating that "in the light of the f acts of the c ase and af oresaid exposition of the legal position, with regard to the identity and creditworthiness of the subscriber comp anies and the genuineness of the transac tion, I am of the Indian th at the credit of ₹5,13,00,000/- in the books of the assessee shall be considered as income of the assessee of the instant previous 31 ITA No. 270/Kol/2020 Gulmohar Distributors Pvt. Ltd.
AY 2009-10 year and charged to income tax."Accordingly, he added the said amount as unexplained credit in the books of the assessee company and completed the assessment.
9.2. On perusal of the complete order discussed above, it nowhere reveals aboutthe analytical finding at the end of the ld. AO. He simply made a narrative observation on this issue . He just called for information which was already on the record as it was collected in the first round itself. He was directed by the ld. CIT to transmit the information to the ld. Asse ssing Officer having jurisdiction over the subscriber companies. He has not complied with the same. When we weigh the original assessme nt order vis-a-vis the impugned one, both are non-speaking orders, only difference being that ld. AO did not make addition in the first one which was held by ld. CIT to be without conducting any inquiry and in the second one, addition has been made but without complying with the directions given by the ld. CIT.
9.3. Ld. CIT(A) has confirmed the addition mainly on the reason that share subscriber companies did not re spond to the notices issued by the Ld. AO though the same were duly serve d on them. Having considere d the aforesaid facts and observations of the authorities below and the extent of verification done by the ld. AO in the proceedings under section 147 of the Act, we observe that ld. AO has carried out investigation in respect of share capital raised,in the initial assessment proceedings under section 147 by issuing notices u/s 133(6) of the Act which were duly supplied by the said thre e investors. Besides, we note that assessee had furnished details before the ld. AO to prove identity, 32 ITA No. 270/Kol/2020 Gulmohar Distributors Pvt. Ltd.
AY 2009-10 creditworthiness of the inve stors and the genuineness of these transactions. But in the set aside assessment proce edings, ld. AO did not carry out any effective investigation and concluded that assessee has failed to discharge its onus to prove the identity, creditworthiness and genuineness of the transactions by ignoring and overlooking the materialalready available on record.
9.4. We note that ld. AO had all the records before him, on the basis of which, in the first assessment proceedings u/s 147, explanations furnishe d for investments in share capital/share premium was found satisfactory whereas in the set aside proceedings, the same is treated unexplained cash cre dit without carrying out any effective investigation but by merely observing that summons issued under section 133(6) were served but not responded by the investors and thatdirectors of the assessee and share subscribing companies did not comply with summons issued u/s 131 of the Act. Ld. AO has not recorded any finding as to how the share capital and share premium received by the assessee were bogus and unexplained or its own money which was conve rted in the form of share capital and share premium. There is no adverse material brought on record to dislodge the claim of the assessee. Documents already on record have remained uncontroverted.
10. Ld. Counsel placed re liance on the decision of Co- ordinate Be nch of ITAT Kolkata in the case of Aastha Vincom Pvt. Ltd. vs. DCIT in ITA No. 123/Kol/2015 dated 26.08.2022 wherein under similar facts and circumstances, appeal of the assessee was allowed. Since similar fact pattern is involved, 33 ITA No. 270/Kol/2020 Gulmohar Distributors Pvt. Ltd.
AY 2009-10 we also place our reliance on this decision for the purpose of giving our finding. In this case also, ld. AO had made enquiry of five investor companies out of the total eight during the assessment proceedings u/s 147 by calling the de tails u/s 133(6) of the Act. Ld. AO having satisfied, did not make addition towards share capital raised by the assessee during the ye ar. This assessment was also subjected to revisionary proceedings u/s 263 of the Act wherein directions we re given by the ld. PCIT for detailed enquiry by the AO towards share capital raised by the assessee. In the effect giving order of section 263, passed by the ld. AO, additions were made u/s 68 towards share capital raised by the asse ssee. Matter went in appeal before the ld. CIT(A) who confirmed the addition and then Coordinate Bench of ITAT Kolkata gave relief to the assessee. observations and finding arrived at in this decision are reproduced for ease of reference :
"15. Similar de tails/inf or matio n was f iled by the o ther inves tors to who m the notices under sec tion 133(6) of the Ac t wer e iss ued. We no te that these investor h ave responded to the no tice s issued under sec tion 133 (6) of the Ac t by f urnish ing the d e tails of paymen ts duly ev idenced by the ban k state ment, copie s of IT Rs, balance -shee ts and Prof it & Loss A/cs, and source of inv es tmen ts, e tc. and the ld. Assessing Of f icer, af ter examining these de tails f urnished by the assesse e ac cepted these inves tme nts and n o additio n was made in the as sessmen t u/s 143(3) r. w.s. 147 of the Ac t. The ld. Pr. C IT in the revisionary order passed unde r sectio n 263 of the Act date d 07.03.2013 issued the f ollo wing d ire ctions to the ld. Assessing Of f icer to c arry out the inves tigation af ter conducting indepe nden t inquir y in par agr aph 19 of the o rder, whic h is ex tr acted as belo w:-
19. In view of the above, the order passed by the A.O. is erroneous and prejudicial to the interest of revenue and hence, the order passed by the A.O. is set-aside with the direction that he/she should pass the assessment order after conducting independent detailed and complete enquiries into the subscription to the share capital and premium to the extent of Rs.
7,86,50,000/- introduced in this case. The A.O. should trace the source of share capital by enquiring into the various layers through 34 ITA No. 270/Kol/2020 Gulmohar Distributors Pvt. Ltd.
AY 2009-10 which the money has been introduced in this company as share capital and also examine the directors of subscriber companies by issuing summons u/s 131 of the I.T. Act. The A.O. should send information to the A.Os. having jurisdiction over the subscriber company to the share capital regarding its investment into share capital & premium paid. The A.O. should conduct independent enquiries to verify the documents filed before him in respect of proof of subscription to share capital. The A.O. should not confine himself to conducting enquiries into the subscribers to the share capital only on selective basis. The A.O. should also call upon the assessee to identify the persons who are shown as directors of the assessee company and examine them on oath to verify their credential as directors. The A.O. should pass speaking order after providing reasonable opportunity to the assessee and verifying the source of share capital including the share premium of all the subscribers and rotation of money through various hands so as to ascertain the true nature of transaction which will bring to the fore, the reality of the transactions.
Hence the order passed by the A.O. u/s 143(3) r/w 147 for the AY 2008-09 is set aside to be framed de-novo as per directions contained in the above parts of this order".
16. It is per tinen t to observe th at the ld. Assess ing Of f icer was required to conduc t the enqu iry as con temp lated in the above f inding . We have made an an alysis of the assess ment ord er dated 31.03.2014. Th is imp ugned order is running in to f our pages and the f irs t one & h alf page, the ld. Assess ing Of f icer has g iven background of the litig ation. In page s no. 3 & 4, he has mad e ref erence to the ju dg ments of the Hon'ble H igh Cour ts as we ll as Hon'ble Supre me Cour t n amely CIT, Meeru t -vs .- N av Bh ar a t Dup lex Limited 35 tax man 289 ( Allah ab ad). So me of the judg men ts we h ave already taken cognizance in our obs ervation. The f actual f inding wh ic h was requ ire d to inves tig ate is contained only in par agr aphs no . 3 to 5, which re ad as under: -
"3. Investigation was carried out by calling for information U/S.133(6) of the IT Act, which specifically asked for, besides other details, the following information :
(A) Copies of Trade license of the subscriber companies.
(B) Certified copy of the resolution adopted by the subscriber companies for subscribing to the share capital of the assessee company.
(C) I.D proof, PAN and DIN of the directors.
None of the subscribers furnished the above details. This gives a clear indication about the back also seen from the profit and loss account and Balance they did not have any business activities and their net rupees only. It appears from the information 35 ITA No. 270/Kol/2020 Gulmohar Distributors Pvt. Ltd.
AY 2009-10 collected; companies existed on papers only with a sole purpose a other companies, like the assessee company.
4. Further, summons u/s 131 of the I.T Act were issued to the directors of the assessee company at their .given addresses, but most of the summons were returned unserved by the India Post. However, one person namely Shri Rakesh Kumar Choubey appeared in compliance to the summons. The statement of Shri Choubey was recorded u/s.131 of the I.T. Act on 24.03.2014. The salient points that emerged from his statement are :
A) Shri Rakesh Kumar Choubey has no PAN and is not assessed to Income Tax.
B} Shri Choubey has no idea of Company, Director or Share Capital.
C) Shri Choubey is not aware of the subscriber companies or its subscription in the Share Capital of the assessee company.
D) During the relevant financial year i.e. F.Y: 2007-08 Shri Choubey worked as a Peon in M/s. Khaitan and Associates.
Therefore, it is evident from the statement of Shri Choubey that the assessee company has used the name of Shri Choubey for the purpose of their directors. It is a normal practice for such paper companies to use the name of lowly paid employees likes peons, drivers etc. as directors.
5. The results of investigations discussed above clearly bring forth the fictitious identity of the subscriber companies and also established the fact that introduction of the share capital in the assessee company is not genuine. Just the manner of payment of the share application moneys by the subscriber companies by the account payee cheques is not sacrosanct for a cash credit to become genuine and definitely this cannot make a bogus transaction as a genuine one. Reliance may be placed on the judicial decisions like CIT Vs. Precison Finance Pvt. Ltd, - 208 ITR 465 (Cal), Nizam Wool Agency Vs. CIT, 193 ITR 318 (Ail)".
17. On perusal of the complete order, it no where reve als when ld. Assess ing Of f icer h as star ted the investig atio n? Whe n he has issued no tice under sec tion 142(1) or 133(6) to the subscr iber of the sh are s as we ll as summons under sec tion 131 of the Ac t to the D irec tors of the as sessee-company? There is no analy tical f ind ing at the end of the ld. Asses sing Of f icer. He simp ly made a narr ative observ ation on th is issue, wh ich is almos t a cut and pas te type of f inding . It is per tinen t to note that spec if ic d irec tio ns given by the ld. C IT in the order unde r sectio n 263 are that the ld. Assess ing Off icer wo u ld issue summons under sec tion 131 of the Inco me T ax Ac t to th e D irec tors of subscr iber co mpan ies . He has no t issued any su mmons. He s impl y c alled inf ormation under sec tio n 133(6) of the Act. Such inf orma tion are alre ad y on the 36 ITA No. 270/Kol/2020 Gulmohar Distributors Pvt. Ltd.
AY 2009-10 reco rd and co llec te d in the f irs t round itself . He was d irected to tr ans mit the inf orma tion to the ld. Assess ing Of f icer h av ing jur isd ic tion over the subscr iber companies. He has no t co mplie d with. A perus al of th e f ind ing extr ac ted supr a, no where d isclose d the line of actio n requ ired to be f ollo wed, h as been f ollo wed b y the ld. Assess ing Of f icer. Thus if we were c alled upon th e we ig h the or ig inal assessmen t order, vis-a-v is the pres ent one, bo th are non-spe aking, ma te r ial was co llec ted in the or igin al proce ed ing as is av ailab le on record. We have ref erred in th is order. Bu t the only d if f erence is the Assessing Of f icer did not make add ition ther e witho u t conduc ting any inquiry. The ld. Assessing Of f icer put the assessee under take liabil ity. It s tru ck to our mind whe ther it should be re inves tig ated but ho w many proceed ings are to be taken ag ains t the assessee. None of the author ity is an alys ing the de tails in an an aly tical manner.
18. It is f urnished th at in the se t aside assessmen t proceed ings, the ld. Assess ing Of f icer issued no tices under sectio n 131 of the Ac t to the present and ers twhile D irec tors of the assessee- co mpany, who did no t co mply with the summons ex cept Shr i Rakesh Kumar Cho ubey, whose sta te men t was recorded . The ld. Assess ing Of f icer no ted tha t Shr i Rakesh Kumar Choub ey is no t hav ing an y PAN and no t ass essed to inco me -tax. The Ld. Assess ing Of f icer also no ted th at Shr i Choube y is no t hav ing an y kno wledge abou t its e ith er D irec tor s or share c apital of the assessee-co mp any and he was working as a peo n in M/s. Kh aita n and Assoc iates dur ing F.Y. 2007- 08 and th us he c ame to the conc lus ion th a t Sh r i Rakesh Kumar Choubey was used by the assessee-co mp any just f or f ormal ities sake to co mply with var iou s s tatu tory re quiremen ts, whic h is a common pr ac tic e and held th a t the share cap ital r aised by the as sessee is bogus there by add ing the same to the in co me of the asses see under sec tio n 68 of the Ac t. Fur ther the asse ssee has f iled the proof s of identities cred itwor thiness of the investors and genuineness of the tr ans ac tions bef ore the ld. Assessing Off ice r. We also no te f rom the record bef ore us th at Mr. Rakesh Kumar Choubey re tracted his s tate ment as recorded under sec tion 131 on 26.03.2014 v ide Af f idav it which was attes ted on 27. 03.2014 by No tary Pub lic. We also no te tha t f rom the ev iden ces bef ore us th at Mr . Rakes h Kumar Choube y wa s hold ing a PAN bear ing No. AFHP C39 09G and assessed to tax an d h as regular ly bee n f iling his re turn o f inco me under the charge of ITO, Ward-37(1) , Kolk ata. Theref ore, it is cle ar f rom the above tha t the s ta temen t as called by the ld . Assess ing Of f icer under section 131 is not correc t and canno t be allo wed as b asis f or making add itio n. To the above ex ten t, we no te tha t the allegation of the Assess ing Of f icer f or making additio n was no t correc t. Fur ther the ld. Assess ing Of f icer observed that the assessee-company being a ne wly incorporate d co mpany has issu ed and r aised share capital of Rs.7 crores by issuing sh ares a t a premium of 19 times the f ace value and also that none of the su bscr ibers f urnished the de tails as re quis itioned in the no tices un der section 133( 6) of the Ac t. Bes ides ld. Assess ing Of f icer noted th at upon perusal of the Prof it & Loss 37 ITA No. 270/Kol/2020 Gulmohar Distributors Pvt. Ltd.
AY 2009-10 Accoun t and Balan ce-sheet of the sh are subscr iber co mpanies, i t is c le ar that they did no t h ave any bus iness ac tiv ity and the ir ne t wor th was me agre. The ld. CIT( Appe als) conf ir med the or der of ld. Assess ing Of f icer f or three reaso ns name ly ( i) the share applicants did no t respond to the no tices issued unde r sectio n 133(6) of the Ac t th ough the notices were duly served on the m; ( ii) Summons issued to Shr i Pr ad ip Kejr iwal, pre sent D irec tor of the Co mpany re ma ine d un-serv ed and ( iii) tha t on the b as is of s tate ment recorded of Shri Rakesh Kumar C houbey, ers twh ile D irec tor, it appears th a t he was a du mmy D irec tor and theref ore, an op por tunity of cross examin ation could no t be allo wed since Shr i Rakesh Ku mar Choubey himself was the D irector of th e assessee-Co mp any a t the relev an t po in t of time.
19. Hav ing cons idered the af oresaid f ac ts and observations of the ld. CIT (Ap pe als ) and the exten t of ver if ic a tio n done by the ld. Assess ing Of f icer in the proceedings under sectio n 147 of the Ac t, we o bserve th a t the ld. Assess ing Of f icer has carr ie d ou t f ull inves tig atio n in to the share c apital/share pre mium in the assess men t procee ding s under sectio n 147 of the Ac t b y issuing no tic es u/s 133(6) of the Ac t, which were du ly su pplie d by th e said inves tors. Be sides we no te tha t the assessee has f ully f urnished all the de tails bef ore the ld. Assess ing Of f icer to prove the identity , creditwo r thin ess (source of money) of the inves tors and the genuinen ess of these tr ansac tions. Bu t in the se t assess men t proceedings, the Assessing Of f icer has no t carr ied ou t any inves tig ation and harped on the f ac t tha t the asse ssee has f ailed to d isch arg e its onus to prove the iden tity, cred itwo r th iness and g enu ineness of the tr ansactions by ignor ing and ov erlooking the f ac ts av ailab le on record. We no te th at the ld. Assess ing Of f icer has all the records bef ore h im on the bas is of which in the f irst assess men t proceedings, the ld. Assessing Of f icer he ld the inves tmen ts in sh are capital/sh are pr emium as genuine, whe re as in the se t as ide proceedings, the ld. Assessing Of f icer has tre ated the s ame inve s tmen ts as bogus and non-genu ine withou t carrying out an y inves tig a tion by mere ly relying on the f act tha t su mmo ns issued under sec tio n 133(6) were served but no t respond ed by the inves tors and also f orme r and present Direc tors of the assessee co mpany did not comply with summon s issued u/s 131 o f the Ac t except one S hr i Ra kesh Kumar Chou bey. In our v ie w, the action of the ld. Assess ing Of f icer in mak ing addition withou t co mp lying the d irec tio n issued by the ld. Pr. C IT spe cif ic ally in par agr aph 19 of the order as reproduced hereinabove canno t be sus tained. The additio n was made s imply f or the r eason that ld. Pr. C IT has exerc ise d his jur isdic tion u nder sec tion 263 of the A ct se ttin g as ide the or ig in al assessmen t. We also note that the ld. Assess ing Of f icer has ig nor ed the f ac ts, docu men ts, conf ir mations and ev idences, wh ich were av ailable on re cord on the as sessmen t f older. In our o pin ion, there is no bar in the Act to issue of shares at a pre mium as it is the prerogative of the Bo ard of Dir ec tors to decide the pre miu m amoun t and the assessee was no t r equ ired to prove the purpose or justif ic ation f or charg ing pre miu m on shares. The ld. Counsel f or the assessee to bu ttress the co nte n tio ns in 38 ITA No. 270/Kol/2020 Gulmohar Distributors Pvt. Ltd.
AY 2009-10 f avour of the asse ssee placed re lian ce is placed on the judgment of the Hon'ble M umbai Tr ibunal in the case of AC IT -vs. - Gag andeep Inf rastructure Pv t. Limited (2014) 40 CCH 0128. The operating par t is extr ac ted as under: -
"We have carefully perused the orders of the lower authorities. In our considered view, the issue of shares at premium is always a commercial decision which does not require any justification. Further the premium is a capital receipt which has to be dealt with in accordance with Sec. 78 of the Companies Act, 1956. Further, the company is not required to prove the genuineness, purpose or justification for charging premium of shares, share premium by its very nature in a capital receipts and is not income for its ordinary sense. It is not in dispute that the assessee had filed all the requisite details/documents which are required to explain credits in the books of accounts by the provisions of Sec. 68 of the Act. The assessee has successfully established the identity of the companies who have purchased shares at a premium. The assessee has also filed bank details to explain the source of the shareholders and the genuineness of the transaction was also established by filing copies of share application forms and Form No. 2 filed with the Registrar of Companies. The entire dispute revolves around the fact that the assessee has charged a premium of Rs. 190/- per share. No doubt a non-est company or a zero balance sheet company asking for Rs.190/- per share defies all commercial prudence but at the same time we cannot ignore the fact that it is a prerogative of the Board of Directors of the company to decide the premium amount and it is the wisdom of the share holders whether they want to subscribe to such a heavy premium. The Revenue authorities cannot question the charging of such huge premium without any bar from any legislated law of the land. The amendment has been brought in the Income Tax Act under the head "Income from other sources" by inserting Clause (viib) to Sec. 56 of the Act wherein it has been provided that any consideration for issue of shares, that exceeds the fair value of such shares, the aggregate consideration received for such shares as exceeds the fair market value of the shares shall be treated as the income of the assessee but the legislature in its wisdom has made this provision applicable w.e.f. 1.4.2013 i.e. on and from A. Y. 2013-14. In so far as the year under consideration is concerned, the transaction has to be considered in the light of the provisions of Sec. 68 of the Act. There is no dispute that the assessee has given details of names and addresses of the share holders, their PAN Nos, the bank details and the confirmatory letters."
20. The above decis ion of the Tr ibunal h as been af f irmed by the Hon'ble Bo mb ay H igh Cour t by d ismissing the appe al of th e Revenue repor ted in (2017) 394 IT R 680 (Bo mb ay.). The case of the assessee also f inds suppor t f rom the ano ther dec is ion of the Hon'ble M adhy a Pr adesh H igh Cour t in the c ase of C IT - vs.- Chain House In ternational (P) Ltd. repor ted in 98 tax mann.co m 47, where in the Hon'b le Cour t h as held as under:-
"Issuing the share at a premium was a commercial decision. It is the prerogative of the Board of Directors of a company to decide the 39 ITA No. 270/Kol/2020 Gulmohar Distributors Pvt. Ltd.
AY 2009-10 premium amount and it is the wisdom of shareholder whether they want to subscribe the shares at such a premium or not. This was a mutual decision between both the companies. In day to day market, unless and until, the rates if fixed by any Govt. Authority or unless there is any irestriction on the amount of share premium under any law, the price of the shares is decided on the mutual understanding of the parties concerned."
21. Theref ore, the issue of share at pre miu m c anno t be a ground f or making addition. We also note tha t the allegation of the author ities be lo w tha t the share applic ants did no t respo nd to the no tic es issued under sec tion 136 of the Ac t, where as this is no t the allega tion tha t no tices were no t served upon the share applicants. We note tha t the inf ormation /de tails/ev idences of al l these share applican ts were available with the ld. Assess ing Of f icer such as P ANs, addresses, copies of bank s ta te me nt, annual aud ited accounts, etc. Admit tedly and unden iable, the initial burde n of proof lies on the assessee bu t once he pr oves the iden tity of the share applic ants by e ither f urnish ing PAN or inco me tax assessmen t number and sho ws the genuineness of tr ans ac tion by sho wing money in his books e ither by ac count payee or by dr af t or an y o ther mode, then the onus of proof would shif t to the revenue. Just because the creditors/share app licants could no t be f ound a t the address given, it wo u ld no t give the revenue the r igh t to invoke sec tion 6 8 of the Ac t. One mus t no t lose s ig ht of the f act tha t it is the revenue which has all the po wers to tr ace any person and is also se ttled la w that the assessee need no t to prove the source of source. T he case of th e assessee f inds suppor t f rom the dec is ion of the Hon'ble Delhi H ig h Cour t in the c ase of C IT -vs.- Or is sa Cor por ation Pv t. Limited (1986) 159 ITR 7 8 (Del.), where in it h as been held as und er:-
The assessee had given the names and addresses of the alleged creditors. It was in the knowledge of the Revenue that the said creditors were income-tax assessees. Their index number was in the file of the Revenue. The Revenue, apart from issuing notices under s. 131 at the instance of the assessee, did not pursue the matter further. The Revenue did not examine the source of income of the said alleged creditors to find out whether they were credit-worthy or were such who could advance the allowed loans. There was no effort made to pursue the so-called alleged creditors. In those circumstances, the assessee could not do any further. In the premises, if the Tribunal came to the conclusion that the assessee has discharged the burden that lay on him then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion is based on some evidence on which a conclusion could be arrived at, no question of law as such arises. It cannot, therefore, be said that any question of law arose in these cases. The High Court was, therefore, right in refusing to refer the questions sought for".'
22. The above dec is io n of the Hon'ble Delh i H igh Cour t h as been af f irmed b y the Hon'ble Apex Cour t in ( 1986) 159 ITR 78. Theref ore, we observe th at non-compl iance of no tice by the share 40 ITA No. 270/Kol/2020 Gulmohar Distributors Pvt. Ltd.
AY 2009-10 applicants in the second round of assess men t proceed ings cannot be used to dra w adverse inf erence agains t the assessee as the Revenue was having all the necessary ev idences/do cume nts whic h were f iled by the share applican ts in the f irs t round of assess men t in response to the no tices issued under sectio n 133(6) of the Ac t.
23. On the issue of share applicants, th e y are no t hav ing any bus iness ac tiv ity and their ne t wor th was also very me agre. We no te that the sh are applica tion was rece ived through Banking channe l out of o wn f unds of investing co mpan ies as is c lear f ro m the aud ite d annu al accou nts and th at it is no t neces sary tha t source of investmen t is to be ou t of tax able inco me. The assessee's case f inds suppor t f rom the dec is io n of Ami Indus tr ies ( Ind ia) Pv t. L imite d ( ITA 123 1 of 2017) passed by the Hon'ble Bo mbay H ig h Cour t, where in the Hon'ble Cour t has obs erved as under:-
"It was no t ne cessar y th at share applic ation mo ney should be inves ted out of taxable in come on ly".
24. On the th ird issue that su mmons issued under sec tion 131 f o the Ac t to the ers twhile and present Direc tors re tu rned un- served excep t Mr. Rakesh Kumar Choubey, who was ers twhile D irec tor and appe ared to co mply with the su mmons. We no te th at accord ing to the ld. Assessing Of f icer, he was no t assess ed to tax and he was not h av ing any PAN and he was working as a Peon to M/s. Khaitan& As sociates. We note that the observatio ns of the ld. Assess ing Of f icer are no t correc t as Shr i Rakes h Kumar Choubey is ho ldin g PAN and also as sessed to tax and f iling his return of inco me un der the ch arge of ITO, Ward -37(1), Ko lkata. We also no te f rom the reasons bef ore us tha t the s tate ment g ive n under sec tion 1 31 was re tr acted jus t af ter two d ays reco rd ing. We no te that in the f ir s t round of assessmen t, the tr ans actions were examined and ver if ied comple tely and acce pted by the ld. Assess ing Of f icer, then wh at ne w f acts h ave co me on reco rd pro mp ting the ld. Assess ing Of f icer to take a con tr ary v ie w. The ld. Assess ing Of f icer has not recorded any f ind ing as to ho w the share capital/sha re premium receiv ed by the assessee were bogus and unexp lained or his o wn money was conv er te d in the f orm of share c apital/share premiu m. T hus no adverse mate r ial/ev idences were brough t on record and d ocumen ts alre ad y on record r e mained uncon trover ted. Under the se f acts and c ir cu ms tances, the ld. Assessing Of f icer canno t be allo wed to d is turb the s atisf action recorded by the f irst ld. Assess ing Off icer in the f irs t round b ased upon ev iden ces av ailable on record tha t too jus t on the surmises and conjec tures.
25. In v ie w of our abo ve f ac ts, observation and legal pos ition, we are incline d to se t as ide the order of ld. CIT (Ap pe als) and d irec t the ld. Assess ing Of f icer to delete the add ition. "
41 ITA No. 270/Kol/2020Gulmohar Distributors Pvt. Ltd.
AY 2009-10
11. According to us, action of ld. AO while making addition without complying with the directions issued by the ld. CIT as state d in para 18 of the order u/s 263 is unsustainable. We also note that ld. AO has ignored the facts, documents, confirmations and evidences, which were available on record in the assessment folder including that of the assessment done u/s 147, and produce d in the course of hearing before the Bench. Case of the assessee is fortified by the decision of Hon'ble Apex Court in the case of CIT vs. Orissa Corporation Pvt. Ltd. (supra). We therefore, set aside the order of Ld. CIT(A) and delete the addition made by the Ld. AO in respect of share capital and share premium raised by the assessee during the year under consideration.
12. In the result, appe al of the assessee is allowed.
Order pronounce d in the open court on 9th June, 2023.
Sd/- Sd/-
(Sanjay Garg) (Girish Agrawal)
Judicial Member Accountant Member
Dated: 9 t h June, 2023
JD, Sr. P.S.
Copy to:
1. The Appellant:
2. The Respondent:.
3. CIT(A)-12, Kolkata
4. The Pr. CIT, Kolkata.
5. DR, ITAT, Kolkata Bench, Kolkata
//True Copy//
By Order
Assistant Registrar
ITAT, Kolkata Benches, Kolkata