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
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