Ideal Vyapaar Pvt Ltd Vs ITO (ITAT Kolkata)
In the case of Ideal Vyapaar Pvt Ltd vs. Income Tax Officer (ITO), Kolkata, the Income Tax Appellate Tribunal (ITAT) upheld the addition of share premium as the assessee failed to adequately explain the transactions in question.
The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi. The order was passed against the assessment order by the Income Tax Officer (ITO), Ward-6(2), Kolkata under section 143(3) of the Income-tax Act, 1961 for the Assessment Year 2012-13.
The primary issue raised in the appeal was the addition of Rs. 2 crore made by the Assessing Officer (AO) towards share capital, including share premium, raised by the assessee during the relevant year. The AO treated this amount as an unexplained cash credit under section 68 of the Income-tax Act.
Despite being given multiple opportunities, the assessee failed to appear before the ITAT to represent their case. Notices for hearings were sent through registered post as well as email, but the assessee did not respond. Consequently, the ITAT proceeded with an ex-parte hearing.
The AO had noted during the assessment that the assessee had raised share capital of Rs. 2 crore, including share premium. The AO called for explanations and details, to which the assessee complied by submitting various documentary evidence. However, the AO, applying the doctrine of the theory of preponderance of human probability, concluded that the amount was unexplained cash credit under section 68 of the Act and made the addition.
