ITAT dismisses Appeal u/s 68 of Income Tax Act Due to Absence of Explanation for Transactions [Read Order]

The Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ) dismissed the appeal under Section 68 of the Income Tax Act,1961 due to the absence of an explanation for the transactions.

The assessee Ideal Vyapaar Pvt. Ltd.  filed its return of income on 07.12.2012 reporting total income of Rs.2,834/-. In the course of assessment, AO noted that assessee has raised share capital of Rs. 2 Cr. including share premium. Explanations and details were called for. Assessee made the necessary compliance by filing various documentary evidence, facts of which are noted by the AO by taking into the material placed on record.

The AO referred to certain judicial precedents on the doctrine of theory of preponderance of human probability and arrived at the adverse conclusion of holding the sum of Rs. 2 Cr. as unexplained cash credits under Section 68 of the Income Tax Act and made the addition thereof.

Aggrieved, assessee went in appeal before the Commissioner of Income Tax (Appeals)[CIT (A)], and referring to several judicial precedents dismissed the appeal of the assessee. Aggrieved, the assessee was in appeal before the tribunal.

The two member bench of the tribunal comprising Girish Agarwal (Accountant member) and Rajapal Yadav (Vice President) observed that the assessee has been contesting that it had made all the submissions in support of the transaction in which additions have been made which have not been considered.

However, it was a fact on record that some of the notices issued for fixing the hearing have been returned unserved which were issued on the address mentioned in form 36 and also on email. On certain occasions, assessee has sought adjournments by making applications on its letterheads which were allowed.

Further appears that the assessee has resorted to a pseudo compliance approach by being a spectator of the proceedings. Such an approach of the assessee is futile and infructuous since nothing is explained for the transaction it had undertaken. In the absence of any such explanation coming forth from the assessee, ITAT does not find any reason to interfere with the observations and findings arrived at by the authorities below. Accordingly, grounds taken by the assessee are dismissed. Accordingly, the appeal of the assessee was dismissed.

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