Shree Shoppers Ltd. Vs DCIT (ITAT Kolkata)
ITAT Kolkata held that notice issued under section 143(2) of the Income Tax Act by AO not having valid jurisdiction is not sustainable in law. Accordingly, assessment proceeding based on an invalid notice is liable to be quashed.
Facts- The assessee is a limited company engaged in the business of trading in textile and tyres. Case of the assessee was selected for scrutiny under CASS followed by service of notice u/s. 143(2) and 142(1) of the Act. Assessee has challenged the issuance of notice u/s. 143(2) of the Act stating that the AO issued the notice did not have jurisdiction over its case as the returned income of the assessee is Rs.48.47 lacs.
However, AO treated the share capital of Rs.1,47,75,000/-and share premium of Rs.4,43,25,000/- received from M/s. KHPL as unexplained cash credit u/s. 68 of the Act and made the addition for the same. Certain other disallowances were also made and income assessed at Rs.6,43,81,300/-.
CIT(A) did not decide the legal issue but on merits partly allowed the assessee’s appeal and the addition u/s. 68 of the Act was confirmed holding that the assessee is unable to justify the amount of share premium and the assessee could not prove the genuineness of this cash credit as well as the creditworthiness of the share applicant.
