ITAT Sets Aside ₹6.90 Cr Share Premium Addition for Non-Consideration of Assessee’s Evidence [Read Order]

The Kolkata Bench of the Income Tax Appellate Tribunal ( ITAT ) set aside the addition of ₹6,90,45,000 made under Section 68 of the Income Tax Act, 1961, holding that both the Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) ( CIT(A) ) failed to consider the documentary evidence and written submissions furnished by the assessee during assessment proceedings.

The assessee, Deepmala Vyapaar Pvt. Ltd., filed its return of income for Assessment Year (AY) 2012–13 declaring a total income of ₹42,222. The case was subsequently selected for scrutiny through CASS on the ground that the assessee company had issued its shares to various private companies at a high premium and notices under Sections 143(2) and 142(1) were issued, and the assessee appeared and submitted various details.

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During assessment, the AO completed the proceedings by making an addition of ₹6,90,45,000 under Section 68, treating the share capital and share premium received as unexplained cash credits. Aggrieved, the assessee filed an appeal before the CIT(A).

TheCIT(A) dismissed the appeal ex parte, noting that there was no compliance from the assessee’s side. No consideration was given to the submissions or documents previously filed before the AO.

Before the Tribunal, the assessee contended that the CIT(A) erred in dismissing the appeal ex parte without considering the written submissions placed on record. It was also argued that the AO, despite having received all relevant details and evidence during assessment proceedings, failed to examine them before making the addition.

The Department did not object to the matter being remanded back for fresh consideration.

The Bench comprising Rajesh Kumar (Accountant Member) and Pradip Kumar Choubey (Judicial Member) observed that the CIT(A)’s ex-parte order stemmed from non-appearance, but the fact remained that the assessee had indeed filed submissions during assessment which were not duly evaluated. The Tribunal noted that the AO had failed to consider the documentary evidence placed before him, making it appropriate to restore the matter.

The Tribunal remitted the matter back to the AO to re-examine the issue afresh, holding that the principles of natural justice required proper opportunity and consideration of evidence.

The assessee was directed to cooperate and furnish all necessary explanations and evidence, and the AO was instructed to pass a speaking order in accordance with law after granting adequate opportunity of hearing.

Accordingly, the appeal was allowed for statistical purposes.

The assessee was represented by Miraj D Shah, while Raja Sengupta appeared for the Revenue.

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