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2022 (12) TMI 789 - AT - Income TaxAddition u/s 68 - unexplained cash credit of share capital and security premium received during the year - assessee failed to appear before the AO and assessee did not produce the alleged share holder before the AO for identity, creditworthiness and genuineness of the transaction - HELD THAT - The assessee company has miserably failed to source of alleged cash credit if the assessee had sufficient details to explain the alleged sum. Consistently escaping from appearing before the ld. AO and the appellate authority, CIT(A) indicates that the assessee has no plausible explanation to explain the source of alleged sum of share capital and security premium. In the case of assessee completely failed to explain the alleged cash credit and consistently escaped the provisions of section 68 are attracted. Thus it is held that the assessee has routed its unaccounted income in the books of account in the form of share capital and security premium by arranging the bogus share capital and share premium through accommodation entry provider. Therefore, we find no infirmity in the findings of the CIT(A) confirming the addition made u/s 68 of the Act and same is confirmed. Thus the ground of appeal raised by the assessee is dismissed.
Issues:
1. Ex-parte order passed by CIT(A) 2. Validity of order u/s 144 of the Income Tax Act, 1961 3. Addition of unexplained cash credit u/s 68 of the Income Tax Act, 1961 Ex-parte Order by CIT(A): The appeal was filed against the order of the ld. CIT(A)-18, Kolkata dated 27.06.2018 for A.Y. 2012-13. The assessee did not appear despite multiple notices, leading to an ex-parte adjudication. The registry informed a delay of 17 days in filing the appeal, which was condoned. The case proceeded based on available records. Validity of Order u/s 144: The AO completed the assessment to the best of judgment due to non-compliance by the assessee. The AO observed discrepancies in the balance sheet entries regarding share capital and premium. As the assessee did not provide details of shareholders, the genuineness of the transactions could not be verified. Consequently, the AO treated the unexplained cash credit as the assessee's own money and added it to the total income u/s 68 of the IT Act, 1961. Addition of Unexplained Cash Credit u/s 68: The assessee challenged the addition made u/s 68 for unexplained cash credit of share capital and security premium. Despite procuring substantial share capital and premium, the assessee failed to prove the source, identity, and creditworthiness of the alleged creditors. The assessee did not provide necessary details to explain the cash credit, leading to the conclusion that unaccounted income was routed through bogus share capital and premium. The Tribunal upheld the CIT(A)'s decision to confirm the addition of Rs. 23,51,00,000 u/s 68. In conclusion, the Tribunal dismissed the appeal as the assessee failed to provide a plausible explanation for the unexplained cash credit, leading to the confirmation of the addition made by the CIT(A) under section 68 of the Income Tax Act, 1961. The decision was based on the lack of evidence and non-compliance by the assessee throughout the proceedings.
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