Itat/113/2023 Ia No. Ga/1/2023 Principal Commissioner Of Income Tax-2, Kolkata v. M/S. Naina Distributors Pvt. Ltd

OD-4 IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE ITAT/113/2023IA NO. GA/1/2023PRINCIPAL COMMISSIONER OF INCOME TAX-2, KOLKATAVS.M/s. NAINA DISTRIBUTORS PVT. LTD. BEFORE: THE HON’BLE THE CHIEF JUSTICE T. S. SIVAGNANAM ANDThe Hon’ble JUSTICE AJAY KUMAR GUPTADate : 28 JUNE 2023. Mr. Prithu Dudhoria, Adv.for appellant The Court :- This appeal filed by the revenue under Section 260Aof the Income Tax Act, 1961 (the Act) is directed against the order dated4.1.2023 passed by the Income Tax Appellate Tribunal “B” Bench, Kolkata inITAT/651/Kol/2020 for the assessment year 2012-13. The revenue hasraised the following substantial questions of law for consideration : i)WHETHER on the facts and in the circumstances of the case theLearned Income Tax Appellate Tribunal has erred in law indeleting the addition of Rs.4,67,50,000/-made by the AssessingOfficer on account of share capital and premium in the courts ofassessment in absence of identity of the creditors, genuinenessand creditworthiness of the entire transaction ? We have heard Mr. Prithu dudhoria, learned Counsel for the revenue. After carefully considering the findings recorded by the Commissionerof Income Tax, (Appeals) 7 Kolkata (CITA) in his order dated 21.09.2020 andthe findings recorded by the learned Tribunal we find that the entire matter isfully factual. The learned Tribunal has independently examined as to thegenuinity of the transaction in the matter of raising share capital and theTribunal noted that even during the assessment proceedings, the assesseehas furnished all details in respect of the share capital and share premiumraised by the assessee besides the details of the investors by their submissiondated 9.6.2014 in reply to the notice issued by the Assessing Officer underSection 142 of the Act dated 5.5.2014. The Tribunal also noted that theassssee had produced all documents, disclosed the names and addresses andPAN Numbers of the investors, copies of the share allotment advice, copies ofthe share application form, bank statement, statement giving details of shareapplication, money receipt during the year, copy of Form No. 2 evidencingreturn of allotment and copy of Form No. 5 for increase in various capital.Further the assessing officer has issued notice to the investors under Section133(6) on 11.06.2014 for carrying out independent verification of thetransaction and those investors duly responded to those notice and filed therequisite details such as the number of shares subscribed, ledger account,bank statement, explanation for source of funds, income tax returns andaudited financial statements and also assessment order framed underSection 143(3) of the Act in all the cases. The Tribunal further noted that inspite of such being the factual position, the only reason for making theaddition in the hands of the assessee the director of the assessee company did not respond to the summons issued by the assessing officer underSection 131 of the Act. The correctness of this was also considered by thelearned Tribunal and it was held that non appearance of the director cannotbe made a ground for addition in the hands of the assessee under Section 68of the Act when other evidence relating to the raising of share capital qua theshare subscriber were available on record as furnished by the assessee andalso cross verified by the assessing officer pursuant to the enquiry conductedin response to the notices issued under Section 133(6) of the Act. Thelearned Tribunal also referred to the decision of this Court in the case ofCrystal Networks Pvt. Ltd. Vs. CIT. reported in 353 ITR 171 (CAL). Thus we find that there is no question of law much less substantialquestion of law arising for consideration in this appeal.Accordingly, the appeal fails and is dismissed. Consequently, the application also stands dismissed. (T. S. SIVAGNANAM)CHIEF JUSTICE (AJAY KUMAR GUPTA, J.) Pkd/GH.