Case Law Details
Arham Packaging Goods Pvt. Vs I.T.O. (ITAT Kolkata)
Normally, we do not hesitate in adjourning the matters on the request of assessees but we find that it is a case of share application and share premium. There are large number of appeals pending on this issue before the Tribunal and out of them, 95% are not being prosecuted or are not being filed by any genuine business concern. Basically, those appeals are filed by the shell companies and here and there, requests are being made to delay disposal of these appeals. Faced with these situation, we have become little strict in compliance of the hearings, therefore, we decline the prayer of the assessee and proceed to dispose the appeal ex-parte, qua the assessee.
The brief facts of the case are that the assessee has filed its return of income declaring total loss of Rs.9,171/-. Its case was selected for scrutiny assessment and notice u/s 143(2) of the Act was issued and served upon the assessee. The Assessing Officer has observed that during the scrutiny of accounts it was revealed that the assessee has raised share capital of Rs.9,67,59,171/- which contains subscribed and paid up capital of Rs.10,93,950/- and a premium on such subscription at Rs.9,56,65,221/-. In response to the summons issued u/s 131 of the Act, neither the directors of the assessee company appeared nor the directors of the share applicant companies or any evidence was produced before the Assessing Officer. The assessee did not file any details before the Assessing Officer.
The ld. CIT(A) has just concurred with the Assessing Officer because no one had turned up before him also. There is no discussion on the nature of evidence, who are the share applicants, what was their financial health etc. The ld. First Appellate Authority also appears to have reproduced 10 pages out of some cut and paste material containing citations and the proposition of law laid down in those judgments. His contribution qua the issue is only 10 to 15 lines. The assessee did not file statement of facts either before the ld. CIT(A) or before the ITAT. It has not file any confirmation from the share applicants, their financial health or any evidence demonstrating their identity or creditworthiness. The assessee has not filed its own financial status which can demonstrate whether it can command a premium of Rs.9,56,65,221/- on the shares having value of Rs.10,93,950/-. Thus, the assesse company evidently does not have any specific business. It has filed a loss return of Rs.9,171/-. In such circumstances, we are convince that it is a paper company devoid of any business. Hence, the ld. Revenue authorities have rightly held the alleged share application money as bogus and rightly made the addition.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
The present appeal is directed at the instance of the revenue against the order of the Learned Commissioner of Income Tax (Appeal) – 15, Kolkata (hereinafter the “ld. CIT(A)”) dt. 30/10/2018, passed u/s 250 of the Income Tax Act, 1961 (“the Act’), for Assessment Year 2012-13.
2. The assessee has taken three (3) grounds of appeal but its sole grievance is that the ld. CIT(A) has erred in confirming the addition of Rs.9,67,59,171/- which was added by the Assessing Officer u/s 68 of the Act on account of bogus share capital including share premium raised by the assessee.
3. In response to the notice of hearing, an application for adjournment was moved by some representative of the assessee. Some unknown person put his signature by expressing that it is being put for the Director. Every time a letter is being moved by the assessee for adjournment. We have granted three to four adjournments. On 13th December, 2022, we did not wish to grant adjournment and, therefore, informed this aspect on the mobile number of the assessee available in Form 36 and granted two days time. Again a letter is being sent by S.K. Thakur & Associates for more time. It is pertinent to observed that no power of attorney executed in favour of Shri S.K. Thaur, C.A. has been placed on record. Thus, he is not the authorised person to seek an adjournment. Normally, we do not hesitate in adjourning the matters on the request of assessees but we find that it is a case of share application and share premium. There are large number of appeals pending on this issue before the Tribunal and out of them, 95% are not being prosecuted or are not being filed by any genuine business concern. Basically, those appeals are filed by the shell companies and here and there, requests are being made to delay disposal of these appeals. Faced with these situation, we have become little strict in compliance of the hearings, therefore, we decline the prayer of the assessee and proceed to dispose the appeal ex-parte, qua the assessee.
4. The brief facts of the case are that the assessee has filed its return of income declaring total loss of Rs.9,171/-. Its case was selected for scrutiny assessment and notice u/s 143(2) of the Act was issued and served upon the assessee. The Assessing Officer has observed that during the scrutiny of accounts it was revealed that the assessee has raised share capital of Rs.9,67,59,171/- which contains subscribed and paid up capital of Rs.10,93,950/- and a premium on such subscription at Rs.9,56,65,221/-. In response to the summons issued u/s 131 of the Act, neither the directors of the assessee company appeared nor the directors of the share applicant companies or any evidence was produced before the Assessing Officer. The assessee did not file any details before the Assessing Officer.
5. The ld. CIT(A) has just concurred with the Assessing Officer because no one had turned up before him also. There is no discussion on the nature of evidence, who are the share applicants, what was their financial health etc. The ld. First Appellate Authority also appears to have reproduced 10 pages out of some cut and paste material containing citations and the proposition of law laid down in those judgments. His contribution qua the issue is only 10 to 15 lines. The assessee did not file statement of facts either before the ld. CIT(A) or before the ITAT. It has not file any confirmation from the share applicants, their financial health or any evidence demonstrating their identity or creditworthiness. The assessee has not filed its own financial status which can demonstrate whether it can command a premium of Rs.9,56,65,221/- on the shares having value of Rs.10,93,950/-. Thus, the assesse company evidently does not have any specific business. It has filed a loss return of Rs.9,171/-. In such circumstances, we are convince that it is a paper company devoid of any business. Hence, the ld. Revenue authorities have rightly held the alleged share application money as bogus and rightly made the addition. We do not find any error in the order of the ld. Revenue authorities. Accordingly, appeal of the assessee is dismissed.
6. In the result, appeal of the assessee is dismissed.
Order pronounced in the Court on 16th December, 2022 at Kolkata
