The Kolkata Bench Income Tax Appellate Tribunal (ITAT) directed re-adjudication on ex parte order passed without examining credit worthiness of share applicants.
The assessee Goldline Dealers Pvt. Ltd has filed its return of income electronically by declaring total income NIL. The case was selected for scrutiny with reason for selection of large share premium received.
Thereafter, the AO issued notice to the assessee but no one appeared on behalf of assessee. During the financial under contention, the assessee company had raised fresh paid up share capital of Rs 4,70,26,000/-including share premium by issue of fresh shares during the instant previous year.
It was further found that the assessee companies have not been found existing at the addresses given in the return of income. Therefore, the AO holds that the identity of the share subscribers, their creditworthiness and the genuineness of the transactions has not been proved.
Finally, the AO concluded that credit of Rs 4,70,26,000/-in the books of the assessee shall be considered as income of the assessee of the instant previous year and charged to income-tax.
Aggrieved by the order, the assessee filed an appeal before the Commissioner Of Income Tax (Appeals).
It was observed by the tribunal that AO during the proceedings did not apply his mind for finding actual reason.
Further, it has found by the tribunal that AO in the second paragraph of the first page observed that the assessee had raised fresh paid-up share capital of Rs. 4,70,26,000/-. Thereafter, the AO recorded a finding in one and a half page which has no coherence with the subject.
The Assessment order did not disclose who are the share applicants, how much money has been received by the assessee from these share applicants whether they are taxable entities or individuals.
The order of CIT(A) also has readily available material from some earlier discussions in some other cases. Thus the order contains some cut and paste from a readymade available material.
Thus, the absence of details regarding the share applicants there have certain irregularities in the lower authorities ex parte order.
After reviewing the facts and submissions, the two member bench of the tribunal comprising Rajesh Kumar (Accountant Member) and Rajpal Yadav, (Vice President) direct readjudication of the above matter.
Siddarth Agarwal, appeared for the assessee and Vijay Kumar appeared for revenue.
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