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TMI Blog2024 (3) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... d. A.R submitted that for some reasons, the premises of assessee were taken over by the Port Commission and therefore the assessee was not having any access to its premises and therefore the documents desired by the AO could not be filed and assessment was completed on the basis of available records with the assessee. The Ld. A.R therefore prayed that though the Ld. CIT(A) has passed ex-parte order without deciding the issue on merit but in the interest of justice and fair play the matter may be restored to the file of AO as the necessary evidences could not be filed by the assessee before the AO also due to the premises being in the possession of Port Commission. 4. The Ld. D.R on the other hand submitted that the assessee has not appeared before the Ld. CIT(A) despite several notices, therefore the appeal was rightly dismissed by the Ld. CIT(A). The Ld. D.R submitted that before the AO the assessee has submitted the assessment being framed on the basis of documents already submitted and therefore the assessee should not be given the benefit of presenting its case before the AO allowing second round. 5. After hearing the rival contentions and perusing the material on record, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t during the year, the registered office of the assessee company was under renovation and therefore the office was shifted to a new address and the AO was duly informed to the new address which was 85, Bentinck Street, Kolkata-700001, 9830225997. However the AO deputed the Inspector to visit assessee's office on the old address where the Inspector did not find any person of the company and accordingly the inspector did not visit the new address. Thereafter the AO after discussing the general modus operandi of this accommodation entry providers and substantially discussing STR which was named after Shri Chandan Chakraborty director of Satyatej Vyapaar Pvt. Ltd. stated that he was dummy director of the company registered as NBFC and engaged in the business of providing accommodation entries only. The AO issued notice u/s 131 of the Act dated 18.12.2017 to him however the same could not be served upon the assessee share subscribers M/s Satyatej Vyapaar Pvt. Ltd. as the said investor company has changed its office for the reason cited above and the assessee gave a new address to the assessee along with telephone number. Finally the AO added the amount as unexplained cash credit u/s 68 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial on record, we note that the assessee during the year has raised Rs. 18,00,000/- from three parties as stated hereinabove. The assessee has filed the necessary evidences comprising names, addresses, PANs, bank statements, ITRs, balance sheet, profit and loss accounts, share allotment letter, share application with bank statement besides filing the bank statements of the assessee thereby evidencing the receipt of amounts of from these investors. We note that the assessee is a trading in shares and textiles and all the subscribers were also trader in textiles. We also note that it's customary in the business of textiles to business dealings in cash and so deposit into the banks accounts out of sales proceeds is in the normal course of business. Therefore mere fact that the cash has been deposited in the bank accounts of the subscribers immediately one or two days before issuance of cheques in favour of the assessee will not perse prove that these transactions were non-genuine. We have also examined the evidences filed before us in respect of share subscriber companies. We note that these companies are in fact having business in textiles and their turnover justified the cash depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication of these transactions which were duly responded by these investors by filing all the requisite details comprising shares subscribed, ledger accounts, bank statements, explanation for source of funds, ITRs and audited financial statements and also assessment order framed u/s 143(3) in all the cases. The copy of these which are also placed before us at page 15 to 340 in the PB. We also note that the AO has issued summon u/s 131 to the directors of the assessee company to produce managing directors of the share subscribing companies which were not complied with and this is the sole reason for making the addition in the hands of the assessee. The AO has not pointed out any defect or deficiency in the evidences filed by the assessee as well as by the investors. The Ld. CIT(A) has allowed the appeal of the assessee after taking into account all the above facts and has given a detailed findings of fact that AO has not pointed out any defect in the evidences by the assessee as well as by the share subscribers and mainly harped on the non-production of managing directors of the share subscriber companies to make the addition. The Ld. CIT(A) has noted that the assessee has discharge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the advance. Therefore, the attendance of the witnesses pursuant to the summons issued in our view is not important. The important is to prove as to whether the said cash credit was received as against the future sale of the product of the assessee or note. When it was found by the Ld. CIT(A) on fact having examined the documents that the advance given by the creditors have been established the Tribunal should not have ignored this fact findings. Indeed the Tribunal did not really touch the aforesaid fact finding of the Ld. CIT(A) as rightly pointed out by the learned counsel. The Supreme Court has already stated as to what should be the duty of the learned Tribunal to decide in this situation. In the said judgment noted by us at page 463, the Supreme Court has observed as follows: "The Income-Tax Appellate Tribunals performs a judicial function under the Indian Income tax Act. It is invested with authority to determine finally all questions of fact. The Tribunal must, in deciding an appeal, consider with due care all the material facts and records its findings on all the contentions raised by the assessee and the Commissioner, in the light of the evidence and the relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01.2006 is placed in the paper book. Similarly Navalco Commodities Pvt. Ltd. was assessed to tax u/s 143(3) for AY 2005-06 by ITO, Ward-9(4), Kolkata by order dated 20.03.2007. Similarly Jewellock Trexim Pvt. Ltd. was assessed to tax for AY 2005-06 by the very same ITO, Ward- 9(3), Kolkata assessing the assessee. In the light of the above factual position which is not disputed by the revenue, it cannot be said that the identity of the share applicants remained not proved by the assessee. The decision of the Hon'ble Allahabad High Court as well as ITAT, Kolkata Bench on which reliance was placed by the learned counsel for the assessee also supports the view that for non-production of directors of the investor company for examination by the AO it cannot be held that the identity of a limited company has not been established. For the reasons given above we uphold the order of Ld. CIT(A) and dismiss the appeal of the revenue." In the instant case before us also, the assesse has furnished all the evidences proving identity and creditworthiness of the investors and genuineness of the transactions but AO has not commented on these evidences filed by the assessee. The AO simply harped on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ements and also assessment order framed under Section 143(3) of the Act in all the cases. The Tribunal further noted that in spite of such being the factual position, the only reason for making the addition in the hands of the assessee the director of the assessee company did not respond to the summons issued by the assessing officer under Section 131 of the Act. The correctness of this was also considered by the learned Tribunal and it was held that non appearance of the director cannot be made a ground for addition in the hands of the assessee under Section 68 of the Act when other evidence relating to the raising of share capital qua the share subscriber were available on record as furnished by the assessee and also cross verified by the assessing officer pursuant to the enquiry conducted in response to the notices issued under Section 133(6) of the Act. The learned Tribunal also referred to the decision of this Court in the case of Crystal Networks Pvt. Ltd. Vs. CIT. reported in 353 ITR 171 (CAL). Thus we find that there is no question of law much less substantial question of law arising for consideration in this appeal. Accordingly, the appeal fails and is dismissed." We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Learned Tribunal and it was held that non -appearance of the director cannot be made a ground for addition in the hands of the assessee under Section 68 of the Act when other evidence relating to the raising of share capital qua the share subscriber were available on record as furnished by the assessee and also cross verified by the assessing officer pursuant to the enquiry conducted in response to the notices issued u/s 133(6) of the Act. The Learned Tribunal also referred to the decision of this Court in the case of Crystal Networks pvt. Ltd. vs. CIT reported in 353 ITR 171 (CAL).
Thus we find that there is no question of law much less substantial question of law arising for consideration in this appeal.
Accordingly, the appeal fails and is dismissed.
Consequently, the application also stands dismissed. "
We therefore respectfully following the above decisions, set aside the order of Ld. CIT(A) and direct the AO to delete the addition.
10. In the result appeal in ITA No. 760/Kol/2023 is allowed for statistical purpose where appeal in ITS No. 759/Kol/2023 is allowed.
Order is pronounced in the open court on 29th February, 2024 X X X X Extracts X X X X X X X X Extracts X X X X
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