Andromeda Communications Pvt. Ltd. Vs ITO (ITAT Kolkata)
Kolkata: The Income Tax Appellate Tribunal (ITAT), Kolkata, in the case of Andromeda Communications Pvt. Ltd. versus the Income Tax Officer, has set aside an addition of over ₹1.65 crore made by the Assessing Officer (AO) and upheld by the Commissioner of Income Tax (Appeals) [CIT(A)] concerning unexplained cash credit under Section 68 of the Income Tax Act, 1961. The Tribunal ruled that mere non-compliance with a summons issued under Section 131 of the Act is not a sufficient ground for making an addition when the assessee has otherwise furnished relevant evidence regarding the share capital and premium received.
The case involved Andromeda Communications Pvt. Ltd., which had received ₹1,65,60,806/- during Assessment Year 2012-13 as share capital and share premium. The company issued equity shares of face value ₹10 each at a premium of ₹482 to three individuals: Shri Ishwari Prasad Tantia, Smt. Laxmi Tantia, and Smt. Anita Tantia. These individuals were identified as existing shareholders or their relatives.
During the scrutiny assessment, the AO noted the large share premium received. While the assessee partially complied with information requests and furnished some evidence, the AO issued summons under Section 131 for independent verification, which the assessee did not comply with. The AO also issued notices under Section 133(6) to the share subscribers, which were complied with by the investors providing details.
